With the increase of the civil and commercial transactions between China and Arabia Gulf countries in recent years, the business disputes between both sides increase as well. China and Arab countries have paid much attention to the efficient and fair settlement of such disputes to maintain a long-term sustainable development of business relations. The author first examines the current investment and trade disputes between both sides and the existing legal framework for settling such disputes, eg, litigation, mediation, arbitration, etc. Then the author proposes that the business disputes between China and Arab Gulf countries should be settled through amicable means such as mediation and arbitration. In case of dispute, the parties involved had better settle their disputes through mediation with the help of the mediation institutions from both sides. If the mediation fails, the parties may submit their disputes to arbitration instead of litigation, considering the difficulties in litigation and the convenience through arbitration. When the parties choose to arbitrate their disputes in the Arab Gulf countries, they’d better choose to arbitrate in the prestigious arbitral institutions in the region, also taking into account other elements such as whether the country in which the arbitration takes place adopted the UNCITRAL Model Law on International Commercial Arbitration or not and whether it ratified the New York Convention or not.