Tom Fowdy says the city stands as the gateway to China and as a symbolic mediator between the country and the world

The International Organization for Mediation has decided to set up its headquarters in the Hong Kong Special Administrative Region. IOMed is a formalized medium where businesses can resolve disputes and conflicts without the intensity of formal legal action, and thus establish resolutions and settlements outside the courtroom. While mediation seeks to find a suitable middle ground between parties, arbitration typically enforces binding agreements and awards.

Hong Kong is one of the most important business centers in the world, and has built its legacy on being a gateway not only to China, but all of Asia and the Pacific. It is a home of commerce, free trade, and finance, with enterprises from all over the world flocking to the city due to its low tax regime, rule of law and the abundant opportunities it offers. This factor has remained unchanged, both statistically and sentimentally, despite a concerted campaign to brand the city “dead” amid political arguments.

And the establishment of a headquarters for this prestigious organization in the SAR is only further proof of that. First of all, it shows that the business environment in Hong Kong is thriving and is prominent enough to demonstrate a demand for arbitration and mediation services. In such an active business environment, issues will naturally arise every single day, as they do around the world. There are payments to be chased, products to be supplied and the specifics of contracts to be enforced. Although Hong Kong leads the world in the “business rule of law” category, the process of initiating court and legal action can be long, tedious and stressful.

Thus, the process of arbitration and mediation provides an easier, cheaper, and faster way to resolve disputes. Professional mediators and arbitrators allow the disputing parties to come together in a formalized and neutral environment that allows them to reach a settlement, yet without the stridently punishing outcomes of a courtroom. It provides a secure, professional and productive setting, thus it becomes the key alternative to lawsuits, which should only be utilized as a last resort. This itself improves the “business rule of law” climate of the city, showing that businesses have options to turn to if issues arise. This creates confidence and reassurance.

In the global sphere, it has been a longstanding issue that developing nations, also referred to as members of the Global South, have been underrepresented and lacked sufficient influence in the realm of global governance. This disparity is especially stark within the international dispute resolution framework. The founding of the IOMed, and the positioning of its headquarters in Hong Kong, represents a significant step toward enhancing the conventional mechanisms of international governance.

Furthermore, the IOMed marks a progressive evolution in the structure of global governance, poised to encourage a more diverse approach and grant developing countries a greater voice in the formulation of international regulations.

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The endorsement of the city by the IOMed illustrates that confidence in Hong Kong’s business environment remains robust and vibrant. Moreover, the IOMed is an opportunity for Hong Kong to showcase that it is continuing to adapt according to international needs and circumstances.

In the mist of fluctuating geopolitical landscapes, executives often struggle in dispute resolution with local or international clients, especially when there are different attitudes and cultural norms in doing business or handling disagreements. This is especially so in business relationships with entities in mainland China, where owing to China’s opening-up and reform, there has been a slow transition toward international standards and expectations.

Because of this, we are seeing the HKSAR’s fundamental role as the gateway to China highlighted once again, as a symbolic mediator between the country and the world as a whole. Using its unique autonomous system and economic model, the city acts as a mutual benefactor for international businesses and Chinese enterprises alike, and thus the expansion of mediation and arbitration capabilities makes the experience of doing business in Hong Kong safe and more secure.

From a global perspective, China, as well as the SAR, is well positioned to contribute its wisdom in global governance with the IOMed as the newly established platform to serve the Global South via Hong Kong.

Whoever said Hong Kong was dead?

The author is a British political and international-relations analyst.

The views do not necessarily reflect those of China Daily.