China created its first mediation center with a European country yesterday, the latest effort by China to improve the commercial environment and solve a rising number of business disputes.

Italian enterprises will have a cost-effective and time-saving way to settle disputes with their Chinese counterparts, following the setting up by the China Council for the Promotion of International Trade (CCPIT) and Italian-Chinese Chamber of Commerce of the Italy-China Business Mediation Center.

It is the fifth mediation center that the CCPIT, China's largest trade promotion body, has created with overseas organizations. The previous four were set up in collaboration with Canada, Macao, the Republic of Korea and the United States.

The United Kingdom and Germany also want to have such a center with CCPIT, Huang He, director of CCPIT's legal affairs department, told China Daily.

The Italy-China center will offer companies in both countries a relatively speedy and more inexpensive alternative to both the domestic court system and binding arbitration to resolve business disputes, said Huang.

"Usually, mediation is the first option for companies to solve business disputes," said Huang.

The center will be co-chaired by the two sides and will organize a joint tribunal in dealing with every case, Mario Zanone Poma, president of the Italian-Chinese Chamber of Commerce, said.

This will make the mediation processes and judgments fairer and more reliable.

Preparatory work needs to be done before the center's two secretariats one in Milan, the other in Beijing officially accept cases early next year.

Uniform mediation rules and processes will be worked out to cater for the cultures and legal systems of both countries, and a batch of mediators will be trained.

The center is a result of a potentially increasing amount of commercial friction between Chinese and Italian companies, following a spending spree by Italian firms in China.

Statistics show nearly 500 Italian enterprises have businesses in China, and they invested US$300 million in the Chinese market in 2003, up 80 per cent on a yearly basis.

"Although the trade disputes (between Chinese and Italian companies) are not so many, we should get prepared," said Huang.

The center comes as the Chinese Government is beefing up efforts to improve the business environment with a view to attract more high-quality overseas investment.

On the same day, CCPIT and the Italian Foreign Trade Commission signed a memorandum to enhance cooperation on intellectual property rights protection.

The cooperation will be conducive to safeguarding Italian companies in China, which view creativity and patents as their market strength, CCPIT Chairman Wan Jifei said at the signing ceremony.

(China Daily December 8, 2004)