In December 2018, we discussed international commercial debt collection and the different aspects of it. At Prestige Services, Inc., we provide commercial debt collection services in countries like Mexico and Canada. Every country has different commercial debt collection laws, from Mexico and Canada to China. In this article, we will be explaining the commercial debt collection process in China.

How does China perceive companies?

As it is in many countries, a company in China must be registered with a Chinese name; the company can’t register with an English name. If the company does have an English name, it’s only used for marketing practices.

How does China see Debt Collection?

Over the years, there has been a steady increase in commercial debt collection agencies in China. Normally the Chinese police don’t get involved in payment disputes between companies unless the debt value is significant (millions of US dollars). When companies make credit deals, in many cases there is an unofficial deal struck between different companies via emails or letters. Unfortunately, emails and letters can be difficult to track or even use in court as evidence of a debt.

Because of the tough regulations that usually favor debtors, it’s a good practice to try collecting debt before it reaches the court. Coincidentally, laws in China make the debt collection process flexible when contacting companies about debt. In China, debt collectors are allowed to use aggressive means when contacting debtor companies; this includes visiting the company in question to collect money, harass the company, embarrass the company, and demand the company pay back the debt.