Unlocking contractual freedom and dispute resolution in China’s GBA

Across the GBA, which comprises of nine cities in the Guangdong province in southern China and the Hong Kong and Macao Special Administrative Regions (SAR), disputes are rarely ‘local’ in practice: contracts may be signed in Shenzhen, governed by a Hong Kong-style term sheet, performed across multiple cities, and enforced against assets on both sides of the boundary. This is why arbitration clauses in the GBA are often a commercial pressure point. They must reconcile different systems, fast-moving deal timelines, and increasingly complex industries.

• Parties historically struggling to select Hong Kong and Macau seats of arbitration or governing law where the transaction lacked a traditional ‘foreign element’, limiting options;
• GBA disputes becoming more specialised in areas such as artificial intelligence and data, fintech, life sciences and major construction, increasing the risk of tribunals without the right cross-border and sector expertise;
• Economic acceleration and deeper integration increasing transaction volume, but also amplifying failure points, such as milestone payments, data and intellectual property (IP) allocation, supply-chain disruption, and joint venture governance; and
• Geopolitics and regulatory divergence also triggering performance disputes, involving sanctions, export controls and reshoring, while competition from strengthened Mainland China arbitration centres raises the stakes of forum strategy.

For Hong Kong/Macau-invested entities in a China Mainland GBA city, namely those wholly or partially invested by natural persons, enterprises, or other organisations from Hong Kong or Macao and duly established in Mainland China, policy changes have widened parties’ choices on seat and governing law at the same time as market growth is generating more and newer categories of disputes. Businesses should treat dispute resolution strategy as part of market-entry and project-delivery planning, especially now that the GBA is simultaneously expanding legal options and scaling commercial activity.

To do this, there are several important steps businesses should take:

Match seat and governing law to the transaction ‘stress points’

Early-2025 reforms mean parties can more credibly structure contracts around a Hong Kong and Macau dispute framework even when the deal otherwise looks ‘domestic’, if a Hong Kong or Macau-invested enterprise is registered in one of the nine Mainland GBA cities. Commercially, this matters most for contracts that tend to fail through interpretation and governance rather than pure performance. For these, selecting Hong Kong or Macau as seat, and Hong Kong or Macau law where permitted, can materially improve predictability and reduce the ‘home-court’ perception that often drives escalations.

Build tribunal selection into sector risk management

The GBA’s growth sectors are producing disputes which mix technical and legal issues. These include AI and digital economy projects raising data access, model and IP ownership, life sciences introducing licensing challenges, clinical-data and supply obligations, and infrastructure projects remaining fertile ground for delay, variation and defect claims. Businesses should pre-map arbitrator and expert needs by sector and by Mainland China, Hong Kong and Macau jurisdictional fluency. A standing shortlist, regularly refreshed, reduces appointment friction and increases the odds of a tribunal that can manage technical complexity efficiently.

Design dispute clauses for speed

The market is moving faster than legacy processes. With cross-border services increasingly streamlined and regional standards expanding, parties are closing deals and executing projects at faster speeds. The arbitration clause should therefore ensure operational discipline: escalation steps tied to decision-makers, strict notice and documentation protocols, a workable approach to interim relief and asset preservation, and, where appropriate, expedited procedure or emergency arbitrator options. This is particularly important where performance and assets sit in Mainland China, but the preferred seat is Hong Kong because the best-designed clause anticipates how to stabilise the situation before value of a deal of agreement dissipates.

Future-proof contracts against volatility and geopolitics

Trade restrictions and protectionism are not abstract risks in the GBA, and they can directly disrupt supply chains, technology transfers, cross-border payments, and compliance obligations, each a common trigger for breach, termination, or force majeure arguments during disputes. The most effective contracts link ‘volatility clauses’, such as force majeure, change in law or policy, sanctions and export control compliance or price adjustment, with a dispute pathway that enables rapid determination of threshold issues, staged relief, and evidence preservation, reducing the temptation for parallel proceedings launched purely for leverage.

Plan for cross-border collaboration at the outset

As Mainland Chinese arbitration institutions become more capable and internationally oriented, such as Shenzhen explicitly positioning itself as a world-class arbitration centre, parties will increasingly weigh Hong Kong against Shenzhen and Guangzhou on efficiency, cost, tribunal availability and enforcement strategy. Regardless of seat, cross-border counsel coordination is now a baseline requirement. Many disputes feature Mainland China counsel for local evidence, sites, witnesses and asset tracing, Hong Kong counsel for governance documents, English-law style drafting assumptions, and international arbitration playbooks. A pre-agreed workflow of roles, privilege strategy, budget triggers and escalation prevents loss of momentum when disputes emerge.

This approach is supported by policy and regulatory developments that explicitly broaden party autonomy and improve the mechanics of cross-border arbitration in the region.

To ensure a smooth disputes resolution process, businesses should:

• reassess template clauses now and not at dispute stage. For entities that qualify as a Hong Kong or Macau-invested entity in a Mainland GBA city, evaluate Hong Kong and Macau seat options and, where permitted, Hong Kong and Macau governing law for high-value or governance-heavy contracts;
• contract for volatility by connecting sanctions and export control, change-in-law and force majeure provisions to evidence standards, timelines, mitigation duties and staged dispute determination;
• choose forums with enforcement in mind. Seat selection should be tested against likely asset locations, counterpart structure, and the practical steps needed to secure interim protection and eventual recovery; and
• engineer for speed and preservation by including escalation ladders, documentation protocols, expedited options and interim relief planning especially where assets are primarily in Mainland China.