Enforcing contracts in China is complex — from choosing the right jurisdiction to handling evidence and bilingual contracts. Learn practical strategies to protect your interests in cross-border deals.

Executive Summary

Enforcing contracts in China can be complex and costly — especially for foreign companies. The key to success is

planning for enforcement at the contract drafting stage, not after a dispute arises.

Key strategies:

• Jurisdiction: Choose Chinese courts or arbitration in major cities for better enforceability.
• Governing law: Use Chinese law to streamline proceedings and avoid delays with foreign law evidence.
• Language: Draft bilingual contracts and verify the Chinese version with local lawyers.
• Evidence: Anticipate what proof you’ll need and gather it in China whenever possible to avoid costly authentication procedures.
• Leverage remedies: Use provisional measures like asset freezes or injunctions to strengthen settlement positions.

Bottom line: Proactive contract design and enforcement planning can turn a legal right into a real, enforceable win in China.

Enforcing contracts in China can be challenging for foreign companies. China’s fast-changing economy, unique legal system, and lack of mutual recognition with many foreign courts create real obstacles to turning a contractual right into a tangible recovery.

1. Why Enforcement in China Requires Strategic Planning

For foreign companies, deciding whether to sue or arbitrate in China is rarely simple. Cross-border disputes often involve:

High costs and long timelines.

• Logistical challenges in evidence gathering.
• Limited enforceability of foreign judgments.
• The most effective protection starts at the contract drafting stage, not after a dispute arises. Strong, enforceable clauses — particularly around dispute resolution — can be decisive.

2. Enforcement Options — Lawsuits vs. Arbitration vs. Third Countries

• Foreign judgments:
  Chinese courts generally do not enforce U.S. or many other foreign court judgments due to the absence of mutual recognition treaties. If your counterparty has no assets outside China, a foreign judgment is essentially useless.
• Arbitration:
  China is a party to the New York Convention, which requires enforcement of foreign arbitral awards. However, local courts may still resist enforcement, so China’s Supreme People’s Court has created a reporting system to limit arbitrary refusals.
• Third-country enforcement:
  If the Chinese company has assets in a third country that recognizes your home judgment, you may enforce it there — for example, enforcing a U.S. judgment in Korea if assets are located there.

3. Choosing Jurisdiction and Venue Wisely

More foreign companies are now choos

ing Chinese jurisdiction in their contracts to avoid enforcement hurdles. Benefits include:

Provisional remedies (e.g., injunctions) available in Chinese courts.

Faster leverage in settlement discussions.

• Greater experience with foreign parties in major city courts (Beijing, Shanghai, Shenzhen, Guangzhou).
• Where local bias might be a concern — often in smaller cities — consider arbitration in a major city with reputable institutions like CIETAC.

4. Governing Law — Why Chinese Law Often Makes Sense

While foreign governing law is allowed in many cases, using it adds complexity:

Chinese courts treat foreign law as evidence, requiring authentication and expert testimony.

• Judges may be skeptical of foreign legal reports.
• This process increases cost, delays, and uncertainty.
• Selecting Chinese law often streamlines proceedings, aligns with local practice, and grants access to remedies like pre-judgment asset seizures.

5. Contract Language — Go Bilingual from the Start

• All evidence submitted in Chinese courts must be in Chinese.
• Use bilingual contracts to avoid last-minute translations by court-appointed translators.
• Ensure the Chinese version accurately reflects the English text — review by Chinese lawyers is critical.
• Courts often give significant weight to the Chinese version in interpretation.

6. Evidence Strategy — Avoiding Costly Pitfalls

Evidence sourced outside China must be authenti

cated (translated, notarized, legalized) before a Chinese court will accept it. This process is costly, slow, and subject to deadlines.

Better options:

• Gather evidence within China when possible (e.g., product inspections by Chinese institutions).
• Notarize evidence in China, even if it originates abroad (such as accessing foreign email accounts in China).
• Anticipate evidence needs early to meet court deadlines.

7. Practical Takeaways

To maximize enforceability in China:

• Choose Chinese jurisdiction where possible, especially if the counterparty has no foreign assets.
• Use Chinese law as the governing law for smoother proceedings.
• Draft bilingual contracts and confirm accuracy of the Chinese text.
• Plan your evidence strategy before disputes arise.
• Leverage provisional remedies to increase settlement pressure.

Conclusion

Contract enforcement in China demands more than legal theory — it requires a proactive, strategic approach from the very start of negotiations. By making the right choices on jurisdiction, governing law, contract language, and evidence preparation, you can reduce risk, speed up resolution, and protect your business in one of the world’s most important markets.

In a dispute with your Chinese supplier or business partner? Contact us at inquiries@chinalawsolutions.com