Debt Collections Handbook China 2021

Amicable collections

General information

China has had a vivid history around debt collection. It was prohibited by the Chinese government in the late 19th century and is still prohibited by law today. Therefore, debt collection officially does not exist, but there are companies who provide debt collection services through specialised legal firms that are authorised to collect Chinese debts. China has shown more interest in outsourcing their outstanding receivables to debt collection agencies and law offices. Atradius Collections collaborates with local law firms to provide amicable and legal collection services in China. Our team has experienced collectors with legal backgrounds, which are essential for collecting debts in China.

Interest

From a cultural point of view, Chinese debtors are not used to paying late payment interest charges. So during the first steps of the negotiation, we usually do not claim this part. When the case enters into litigation, we charge interest calculated from the loan rate set by the People’s Bank of China, plus 30% to 50% (the Reply of Supreme People’s Court on the Calculation Standard of Late Payment Penalty).

Debt collection costs

From the point of view of Chinese law, Atradius Collections has the right to charge the costs arising from the collection of debts, but Chinese debtors will not expect to pay them if the debts are paid in the negotiation phase.

The Debt Collections Handbook presents a snapshot of China's economic situation and covers the following topics:

• Accepted and most common payment methods
• Types of companies
• Legal procedures and legal system
• Enforcement in debt, movable and immovable property
• Insolvency proceedings

To read more about steps and procedures undertaken in debt collections in China and other countries:

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