KUNMING - Chinese legal experts on Thursday called for a just and efficient dispute settlement mechanism in trade and economic cooperation between China and South Asia.

"China and South Asia have seen rapid development in economic and trade links," Ma Yi, vice chairman of the Shanghai International Economic and Trade Arbitration Commission, told Xinhua on the sidelines of the First China-South Asia Legal Forum.

China is a major source of foreign investment for South Asian countries. By end of last year, direct investment from China in South Asia was nearly $12.3 billion. South Asian countries have invested $890 million in China.

Ma warned of risks such as ethnic and religious conflicts and terrorism, as well as commercial uncertainties including inflation and unstable banking industries.

"Chinese enterprises need to learn to use other dispute settlement mechanisms apart from litigation in the host countries," Ma said.

Ma's words were echoed by Liu Jingdong, a senior judge with the Supreme People's Court and director of the institute of international law at the Chinese Academy of Social Sciences, who proposed settling disputes via equal consultation and negotiation.

"[We] should set up an innovative dispute settlement mechanism on the basis of existing multilateral, regional and bilateral mechanisms, and take advantage of domestic judicial and commercial arbitration mechanisms, to form a multi-layered dispute settlement framework," he said.