International disputes are often blights to international relations between disputing nations. It is especially true if the disputes, which relate to the vital interests such as sovereignty of states and international peace and security, are not settled in a reasonable manner. The hanging disputes will not only impact on the relations of disputing parties, but also have a bearing on the interests of the region concerned or the whole world. Against this backdrop, it goes without saying how important the dispute settlement mechanism is vis-à-vis dispute settlement. This becomes more prominent when the bilateral relationship between the disputing parties is fragile and intense. Settlement of disputes plays an important role when both parties intend to maintain their relationship at a certain level. In other words, the function of the dispute settlement mechanism is simply to maintain the relationship between the disputing parties.

The past thirty years since China opened its doors to the outside world witnessed constant disputes between China and other countries (especially the United States), ranging from territorial disputes, to political disputes and to trade disputes. As the nation rises as an emerging economic giant, a resurgence of nationalism across the globe and muscle-flexing by China can be expected, and thus more disputes are likely to occur between the country and the rest of the world.