Facing a Legal Matter in China? What to Do First

Introduction

A dispute in China rarely starts with a lawsuit. It starts with a demand letter, a frozen payment, a terminated contract, or an awkward conversation with a local partner. What you do in that window — before anyone files anything — shapes everything that follows. This guide walks through the first moves, in the order they matter.

Three principles frame the rest of this article. First, China has civil-law rules that put hard deadlines on claims and on evidence. Second, a foreign party cannot simply "show up" — powers of attorney and document authentication have their own requirements. Third, protecting assets early is often more decisive than winning later.

Step 1: Check the Limitation Period Before You Do Anything Else

The ordinary limitation period (诉讼时效) for civil claims in China is three years under Article 188 of the Civil Code, running from when the claimant knew or should have known of the infringement and the obligor. It is not a mere formality: a defendant who pleads the limitation period and succeeds will have the claim dismissed regardless of its merits.

Two features are easy to get wrong:

Interruption (Article 195). A written demand, the debtor's acknowledgement of the debt, a partial payment, or the commencement of proceedings can interrupt the period and restart it. Keeping a record of demands is therefore essential — an email asking for payment can reset the clock.
Suspension (Article 194). In the last six months of the period, force majeure or other obstacles can suspend it; time resumes when the obstacle ends.

Do not let negotiations run out the clock. A protective filing or a written demand that restarts the period can run in parallel with settlement discussions.

Step 2: Preserve Evidence While It Still Exists

In Chinese civil procedure, the party asserting a fact bears the burden of proof (Civil Procedure Law, Article 67 in the 2023 numbering), and evidence can be preserved by court application (Article 84). Evidence that disappears in month one is gone for good. Act now on:

contracts, amendments, purchase orders and delivery records;
payment records, invoices and bank statements;
email and messaging threads, ideally with metadata intact;
meeting notes and internal correspondence;
records held by third parties — which can be the subject of a court evidence-preservation application before litigation.

For electronic evidence, keep the original device or the original file; print-outs without a chain of custody are far weaker.

Step 3: Work Out Which Court Has Jurisdiction

Jurisdiction over foreign-related civil and commercial disputes follows the Civil Procedure Law and the SPC's 2022 judicial interpretation (法释〔2022〕18号). In general:

ordinary foreign-related commercial cases are heard by basic or intermediate people's courts depending on the amount and subject matter;
larger claims go to the intermediate level — in some provinces, first-instance jurisdiction over foreign-related commercial disputes involving RMB 40 million (or 20 million) and above is concentrated at the intermediate people's court;
a written jurisdiction clause choosing a Chinese court is respected in foreign-related disputes, and the 2023 amendment to the Civil Procedure Law relaxed the former "actual connection" requirement — though the precise scope is still being clarified, so confirm against current rules.

Jurisdiction is often decided before the merits are ever argued, and an effective jurisdiction or arbitration clause can move the whole dispute into a forum you actually prefer.

Step 4: Get the Power of Attorney and Documents Right

A foreign party litigating in China must appoint a Chinese-licensed lawyer (Civil Procedure Law, Article 274 in the 2023 numbering). The power of attorney (POA) and the party's corporate or identity documents must be:

duly executed, and notarized; and
authenticated for use in China — since China's accession to the Hague Apostille Convention took effect on 7 November 2023, an apostille generally replaces consular legalization.

Note the distinction: the apostille replaces legalization, not notarization. The document still needs to be notarized first, then apostilled. Get this right early — a defective POA can derail a hearing date.

Step 5: Consider Asset Preservation Early

Property preservation (财产保全) — freezing bank accounts, real property, equity or receivables — is available before or during litigation under Articles 103–104 of the Civil Procedure Law, and is one of the most powerful levers a foreign claimant has.

Courts generally require the applicant to provide security (担保); under the SPC's 2016 interpretation (法释〔2016〕22号, Article 5), security for a pre-litigation preservation is generally capped at 30% of the amount sought to be preserved (with flexibility for financial institutions and other special cases).
Preservation is time-sensitive: it works only if applied for before assets are moved.

In practice, a well-timed asset freeze often produces a settlement before trial.

A Day-One Checklist

Confirm the limitation period and issue a written demand if the clock is at risk.
Inventory and preserve evidence — contracts, payments, communications, third-party records.
Map jurisdiction and any governing-law or forum clause.
Notarize and apostille the POA and corporate documents.
Evaluate asset preservation against the counterparty's holdings.

The order matters because the limitation period and evidence preservation are unforgiving, while jurisdiction and the POA are merely slow. Do the unforgiving things first.

How Tianni Law Firm Can Help

Tianni Law Firm (江苏天倪律师事务所), based in Nanjing, Jiangsu, advises foreign individuals and companies from the first notice of a dispute through litigation and enforcement. Our work includes assessing limitation and jurisdiction at the outset, preserving and organizing evidence, preparing notarized and apostilled powers of attorney, applying for asset preservation, and representing clients before Chinese courts at every level.