Holding payments in escrow has the problem of making the administration of justice contingent on the behaviour of a foreign government, which brings us back to where we started with equality before the law. How can we be said to have a higher standard of justice if we explicitly carry out the same kind of instrumental justice we're accusing others of?

Personally I think building trustworthy systems for international arbitration is the method most likely to succeed, if the aim is to come to a common standard of justice for commercial matters then courts on either side of the equation will always be considered suspect by the other side. Both credible international institutions and neutral third countries are a good way of doing this. Appeals to the virtues of different systems aren't going to work here, instead we have to create material incentives that favour a high standard of justice. A reduction in these kind of legal difficulties would improve trust and efficiency.

Obviously this approach has its limits but that's when things like diplomatic pressure, economic protectionism, and in the worst cases economic sanctions come into play. This is all the realm of the executive and legislature though, not the judiciary. The principle is not mere idealism, if we let day-to-day international relations contaminate the judicial process we are committing exactly the same sin that we're accusing China of. By keeping the instrumental aspects of foreign policy isolated in the executive and legislature, this problem is avoided in the interests of justice. It also helps avoid the perception of hypocrisy which is always a diplomatic advantage.