How debt collection works in mainland China, explained end to end by Xu He, Lawyer · Beijing Jingsh Law Firm Ningbo Office, for Ningbo Esteem, Debitura's collection partner in China: who may collect debts, the debtor checks, the demand letter and WeChat negotiation, arbitration or court, court fees, enforcement, bankruptcy, timelines and foreign judgments.
In this walkthrough:
• Why only licensed lawyers may collect debts for others in mainland China
• What the first weeks look like: register check, demand letter, negotiation on WeChat
• Court or arbitration, the payment order, and what proceedings cost
• How enforcement works, and why a court win is not the same as getting paid
• Limitation periods, interest, legal costs and foreign judgments
Chapters:
0:00 Who may collect debts in China, and what do you check first?
1:52 What is your opening move, and what happens in the first weeks?
3:18 Which rules apply: formal notice, time limits, contacting my debtor?
4:08 What if my debtor can't pay in full or disputes the claim?
5:46 Court or arbitration: is there a fast track, and what does it cost?
8:15 What if my debtor ignores you, and what decides whether I get paid?
11:01 Time limits, interest, legal costs and small claims
12:43 What if my debtor goes bankrupt, and how long does each stage take?
13:57 Can I enforce a foreign judgment, and what do I need to send you?
14:51 A case we're proud of, and what has changed recently
⚠️ Notes on the legal detail
• 0:03 The legal basis is a 2000 joint notice of the State Economic and Trade Commission, the Ministry of Public Security and the State Administration for Industry and Commerce, which banned debt-collection companies in mainland China.
• 7:47 Court fees are not a flat 5-6%. They follow a sliding scale (Measures on the Payment of Litigation Costs, 2007): RMB 50 up to RMB 10,000, then 2.5% falling to 0.5% above RMB 20 million. A USD 50,000 claim pays about 1.9%, halved under the summary procedure. The claimant prepays them and the losing party generally bears them.
• 11:07 The 4-year period for international sale of goods comes from China's Civil Code, article 594; the CISG has no limitation rules. Other civil and commercial claims have 3 years (article 188).
• 11:39 Even without a late-payment clause, a seller can claim its loss from late payment, calculated at the one-year Loan Prime Rate plus 30% to 50% (Supreme People's Court Interpretation on sales contracts, article 18).
• 11:58 There is no fixed list of case types. Lawyers' fees are recoverable mainly where the contract provides for them, for guaranteed debts, as reasonable expenses in IP infringement cases, against abusive litigation, and in arbitral awards.
• 12:45 Shenzhen has had a local personal bankruptcy regulation since 1 March 2021; there is still no national personal bankruptcy law.
• 13:27 The timelines (amicable 1-4 months, legal proceedings 1-2 years, auction 6-12 months) are Ningbo Esteem's experience, not statutory deadlines.
• 14:06 US money judgments have been recognised in China on reciprocity since 2017 (Liu Li v Tao Li, Wuhan). IP judgments fall outside the Supreme People's Court's 2021 guidance on foreign judgments, so their recognition is uncertain rather than excluded by law.
• 15:23 Public reports put the 2023 Anhui police action at 179 staff, with collection operations suspended in May 2023; the company's 2019 US listing application was for the New York Stock Exchange.
Our partner in China, Ningbo Esteem:
https://www.debitura.com/partners/nb-esteem
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