In recent years,the confidential nature of arbitration between a host state and an investor of another state (an investor-state dispute) has been questioned .The status of the state determines that it is naturally linked with public interests of the host state .In accordance with the principles of good governance,these kinds of governmental activities need to comply with the basic requirements of transparency and public participation .The main purpose of transparency reform is to promote openness and public participation in arbitration so as to make up for the defect which originates from its confidential nature . Particularly,the reform mainly includes the following aspects : (1) the commencement of proceedings,(2) access to documents during the proceedings,(3) public hearings,(4) amicus curiae briefs,(5) the final award and (6) exceptions to transparency for protection of confidential or other privileged or protected information . NAFTA took the lead in making an attempt in improving transparency,and the U .S . and Canada made relevant regulations in their Model BIT . ICSID Arbitration Rules has also highlighted transparency in its 2006 amendments,and moreover,UNCITRAL adopted the″UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration″in 2013 . The reform aims at enhancing the transparency of the arbitration process so as to ensure the public's right to information,which will to some extent urge the arbitrators to make the decision prudently,and therefore strike a balance between the rights and interests of investors and host states .This provides a good opportunity for China .However,challenges come up as well .How to keep a better balance in the institutional design ? How to seize the initiative on transparency requirements during negotiations of treaties and other international rules ?Furthermore,transparency rules might have significant impact on China's legislation,judiciary and law enforcement,etc . In order to deal with the challenges brought up by transparency reform,China should change its mindset to support the basic requirements on transparency .Even though international arbitration rules already encompass certain transparency requirements,it is still necessary for China to make stipulations on transparency in the BITs or FTAs .In crafting specific provisions,we need to be aware of the application of the most-favored-nation clauses to procedural issues,protect the privileged or protected information and appropriately limit over-participation of amicus curiae .Additionally,transparency rules provide certain helpful reference for our country .We shall take advantage of this opportunity to cultivate nongovernmental organizations as a soft power,so as to better safeguard public interests,and to establish/improve the information disclosure and citizen participation mechanisms with respect to environmental issues and other public interests .