International businesses that purchase from or sell to Chinese
counterparts must always ensure that a proper contract is in place.
Such a contract serves to summarize the terms and conditions of the
deal, and can be the basis for any enforcement actions if the
Chinese supplier or customer fails to execute as agreed.
Upon discovering a breach, negotiations usually takes place to
see whether a solution can be found to both parties'
satisfaction (or at least, acceptance). If no settlement is agreed,
the foreign party can file a claim in court or arbitration.
In litigation / arbitration strategies, there is a special place
for asset preservation. Chinese law expressly allows a claimant to
apply to the competent court to put a restriction on the
opponent's assets. The following two objectives are the most
common:
