Since the traditional definition of ‘foreign elements’ cannot meet the new requirements of the arbitration of China’s FTZs, Chinese judicial practice must create a useful supplement to already established standards. In free trade zone arbitration cases, Chinese courts determine foreign elements based on the standards of subject, object, and legal facts. In this regard, the explanation for ‘other circumstances’ in the First Judicial Interpretation of the Supreme Court on Several Issues Concerning the Application of Law of the PRC on Foreign-Related Relations is based on the three abovementioned elements. The Chinese arbitration system and legislation must be further perfected; however, overly broad standards may impede China’s domestic arbitration system. Moreover, China must add certain restrictions to the standards: judges should distinguish the artificial foreign elements created by contracting parties, controversial civil relations should have a material connection with foreign countries, and discretion should be reasonable with sufficient nucleus.

I. Introduction
 II. Legislative Theory of“Concerning Foreign Affairs” in China’sCivil and Commercial Relations
 III. Determination of the “Foreign-relatedNature” of the Arbitration CasesInvolving the Free Trade Zones
  A. The Scope of the Subject
  B. Fulfilling the Expansion of Object Content
  C. Extending the Time of Legal Facts
 IV. Restrictions on Ascertaining‘Foreign-related’ Factors in ArbitrationCases Involving Foreign Trade Zones
  A. Identifying Parties’ “False Foreign-related” Contracts
  B. The Foreign related Civil and Commercial Relations Must Havea Substantive Connection with Foreign Countries
  C. The Judge’s Exercise of Discretion Should Be Justified
 V. Conclusion
 References

• Xia Tang(Xiamen University)