A Chinese court may preserve property before judgment when the legal conditions are met. Preservation can protect the practical value of a claim while the dispute is being resolved, but it is not automatic and does not guarantee collection. The application must connect the legal claim, the risk, the requested property and any security the court requires.
For a foreign business, the useful first questions are: which Chinese entity owes the obligation, what property is connected to it, why action is needed now, and which court or arbitration route applies?
Pre-suit and in-litigation preservation are different
Articles 103 and 104 of the PRC Civil Procedure Law, 2023 amendment distinguish preservation during proceedings from urgent relief before a lawsuit or arbitration.
| Issue | Before proceedings | During litigation |
|---|---|---|
| Core issue | Urgency: delay would cause difficult-to-remedy harm to lawful interests | Conduct or other circumstances could make enforcement difficult or cause other harm |
| Security | Required under Article 104 | The court may order security under Article 103 |
| Timing rule | 48 hours after the court accepts the application | Urgent applications: 48 hours; other applications follow the applicable rules |
| Follow-up | Commence the lawsuit or arbitration according to law within 30 days of the measures | Manage the claim and preservation together during the case |
A payment delay alone does not settle all these questions. Explain the evidence supporting the risk, such as an identified transfer, a proposed disposal or other facts relevant to urgency and enforcement.
What should the application contain?
Article 1 of the SPC's Rules on Handling Property Preservation Cases, as amended in 2020 identifies the application and supporting materials. Prepare:
- The applicant's and respondent's identities, addresses and contact details.
- The relief sought, its factual and legal basis, and the amount or subject matter.
- Identified property or sufficiently concrete property clues.
- Proposed security, supporting materials, or the basis for not requiring it.
- Evidence explaining the claim and the need for the requested measure.
Review the contract, payment trail and registered Chinese company name together. A supplier's English trading name, an unrelated payment recipient or a shareholder's personal property should not be treated as interchangeable with the actual defendant's assets.
What property can be targeted?
Bank funds, real estate, equipment, equity and other property rights may be relevant, depending on ownership and the applicable procedure. Article 105 limits preservation to the scope of the request or property related to the case. Existing freezes, third-party rights and protected property require separate assessment.
Public searches can reveal useful clues but do not give a private lawyer unrestricted access to confidential banking information. See our lawful asset investigation framework.
How much security is required?
Do not assume every application requires a cash deposit equal to the entire claim. Article 5 of the SPC preservation rules distinguishes the situations: ordered security during litigation generally must not exceed 30% of the requested preservation amount, while pre-suit security generally corresponds to that amount, subject to the rule's treatment of special circumstances. Additional security can be required if the existing security is insufficient to cover potential loss.
The form of security matters as much as the figure. A court may assess property, a third-party guarantee or an insurer's guarantee under the applicable rules. Article 7 addresses preservation liability insurance. Coverage, premium, collateral, exclusions and duration depend on the provider and the court's acceptance. Insurance is an option to assess, not a guaranteed substitute for every applicant.
What does preservation cost?
The court application fee follows Article 14(2) of the Measures for the Payment of Litigation Fees and is capped at CNY 5,000. Legal work, translation, a guarantee premium and any collateral are separate. The cap does not make the whole application a CNY 5,000 service.
Use the court fee guide for the statutory schedule and the cost planning guide for the broader budget.
What do the 48-hour and 30-day periods actually mean?
The 48-hour rule concerns the court's decision after acceptance in the legally specified circumstances. It does not include every preliminary step, and it is not a promise that identified assets will hold sufficient value. Article 4 of the SPC preservation rules also addresses non-urgent applications and the timing after security is provided.
Article 104 requires the applicant to commence the lawsuit or arbitration according to law within 30 days after the court takes pre-suit preservation measures. Otherwise the court must lift the measures. Do not describe this as an invisible automatic switch that always releases a bank account on day 31; counsel must track the actual court measures and procedure.
Prepare the main claim in parallel, preserve proof of the filing or arbitration application, and confirm any continuation or renewal requirements.
What risks should the applicant consider?
Article 108 provides for compensation where an erroneous application causes loss. Preservation is a judicial protective measure, not a license to shut down a counterparty or compel settlement by making unsupported allegations. The court controls the scope, implementation and release of its measures.
A settlement can be considered alongside proceedings, but coordinate payment, security and any application to vary or release preservation. An agreement to pay is different from cleared funds.
What can you do now?
Start with a short summary of the dispute, amount, Chinese company, known property and urgent facts. Our team can identify the information needed to assess the appropriate China-side application. Discuss urgent preservation, or view our asset preservation service.