This study investigates two central puzzles concerning the International Organization for Mediation (IOMed): why it was introduced despite existing institutions such as the World Trade Organization (WTO) and the International Centre for Settlement of Investment Disputes (ICSID) already offering mediation services, and why it was headquartered in Hong Kong. IOMed, initiated jointly by 19 countries, addresses interstate disputes, primarily commercial and investment related. Mediation has gained increasing importance in cross-border disputes, yet international litigation continues to face challenges of neutrality, efficiency, and adaptability. Existing scholarship notes that International Commercial Arbitration has lost flexibility by adopting litigation practices, while international commercial courts have failed to transform dispute resolution. Current literature on intergovernmental mediation organizations highlights their evolving role but remains insufficient to explain IOMed’s rationale and choice of location. Drawing on constructivist frameworks, this study theorizes that China’s perception of an institutional vacuum in mediation, particularly in the Global South where Chinese investments are concentrated, motivated IOMed’s establishment. Employing a multi-method approach including archival research, government documents, speeches, and elite interviews, this study analyzes norms and narratives from 2013 to the present, situating IOMed within broader shifts in global power and the Belt and Road Initiative. In doing so, this study contributes new knowledge to the discipline of Politics of International law and International Organizations.