China’s Parallel Institutions and Governance Models in International Dispute Resolution: The Case of International Commercial Dispute Prevention and Settlement Organization (ICDPASO)

Abstract

China’s rise as a global power has been marked by its creation of “parallel institutions,” which complement or challenge Western-led governance structures. This paper examines the International Commercial Dispute Prevention and Settlement Organization (ICDPASO) as a case study of China’s strategic use of such institutions to reshape global governance within the Belt and Road Initiative (BRI). Using the theoretical lens of parallel institutions, this study explores four dimensions: the motivations behind China’s establishment of ICDPASO, its operational dynamics within the BRI framework, its effectiveness in achieving its goals, and its implications for global governance. The research employs a qualitative approach, including semi-structured interviews and textual analysis of institutional documents. The findings reveal that ICDPASO serves both functional and symbolic purposes. ICDPASO exemplifies indirect, soft governance, distinct from the state-centric or partnership models of other China-led institutions. However, divergent views from end users on its legitimacy raise questions about its ability to gain trust and establish influence in global governance. This study contributes to interdisciplinary discussions on governance, offering insights into how rising powers like China use parallel institutions to address legitimacy gaps, foster influence, and explore alternative governance models.