The most important feature of the contemporary world is globalization with a high degree of economic interdependence among nations, which includes breaking down national economic barriers as well as the increasing cross-border economic exchanges and transactions of goods, services, and capital, not only in a large scale but also at a high frequency. The spread of market economy across the globe has created a global market, which effectively allocates resources and distributes them at a global level. It was the development of technology relating to information, transportation, and communications, such as the internet and teleconferencing, that enabled the effective and smooth transnational transactions and exchanges at reduced transaction costs. Globalizations a dynamic process that involves the flow of goods, services, capital, and technology, as well as culture. Meanwhile, it also promotes the homogeneity and interaction of different cultures. Understanding different cultures is vital for global business, including investment. Ignorance of cultural dimension may lead to difficulty, if not impossibility, in achieving successful business. Apart from the lack of awareness of different cultures, insufficient communication between transaction parties also causes misunderstandings and conflicts. It is possible, for instance, for a Chinese company to sign a contract with no understanding of its terms. Moreover, discrepant conceptions of different people, organizations, and governments are also major sources of conflicts. A significant aspect of international economic exchanges is investment, which has become part of development policies of many countries. In fact, some of the regimes may even rely on foreign direct investment for their effective control. In these circumstances, most countries, if not all, try to improve their investment environment by accepting, inter alia, investor-state arbitration in order to compete for foreign direct investment. However, recent arbitration decisions are not up to the expectations, to say the least, of investment host countries. This article analyzes the contemporary issues relating to international investment, and considers whether mediation can serve as an alternative for resolving investment disputes. In this regard, it will examine the Chinese culture and practice in resolving disputes involving foreign investors and the Chinese government to determine if the Chinese experience could be adopted as an Asian value in promoting foreign direct investment.

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