Enforcing U.S. Judgments in China: What Judgment Creditors Need to Know
For years, the standard advice about enforcing U.S. judgments in China was simple: don’t bother. That advice is now outdated.
It is still not easy or inexpensive to enforce a U.S. court judgment in China. And it is also far from automatic. But Chinese courts have become more willing to recognize and enforce foreign civil and commercial judgments, including U.S. judgments, when the judgment creditor can prove reciprocity, proper service, due process, finality, and no violation of Chinese public policy.
If your defendant has assets in China, a U.S. judgment may be worth pursuing there. But the enforcement case is usually won or lost before anyone files in China. The U.S. litigation record needs to be built with China enforcement in mind.
What “Enforcing a Judgment in China” Means
When a U.S. company wins a money judgment in a U.S. court, that judgment does not automatically reach assets in China. If the defendant’s bank accounts, real estate, equity interests, receivables, or operating assets are in China, the judgment creditor usually must ask a Chinese court to recognize and enforce the judgment.
This process is called judicial recognition and enforcement, or JRE.
Recognition means the Chinese court accepts the legal effect of the foreign judgment. Enforcement means the Chinese court allows collection against assets in China. In practice, judgment creditors usually seek both, because recognition without collection does not get anyone paid.
China does not have a bilateral judgment recognition treaty with the United States. Nor is there currently a U.S.-China treaty framework in force that makes recognition of ordinary U.S. civil and commercial judgments automatic. The Hague Judgments Convention is now in force for certain jurisdictions, and the United States has signed it but not ratified it. China is not currently listed as a signatory or contracting party, so U.S. judgment creditors must rely primarily on Chinese domestic law and reciprocity.
China’s amended Civil Procedure Law now addresses recognition and enforcement of foreign judgments in more detail, including recognition, refusal grounds, indirect jurisdiction, parallel proceedings, and remedies after a recognition ruling. The 2023 amendments added Articles 300-303, helping fill out what had previously been a much thinner statutory framework.
U.S.-China JRE applications are generally brought in a Chinese intermediate people’s court with jurisdiction, usually based on the respondent’s domicile or the location of enforceable assets. These cases may also receive higher-level scrutiny within the Chinese court system. That can make the process slower and more formal, but it can also reduce the risk of an inexperienced local court mishandling an international judgment recognition issue.
The Old View: China Will Not Enforce U.S. Judgments
The old view was based on real experience. Earlier U.S. judgment enforcement efforts in China virtually always failed, especially where Chinese courts found no established reciprocity between China and the United States.
Several older U.S.-China judgment recognition cases failed, including cases in 2009 and 2010, because Chinese courts found a lack of reciprocity. Those cases matter historically, but they do not reflect where Chinese courts stand today.
The turning point came in 2017 with the Wuhan Intermediate People’s Court decision in Liu Li v. Tao Li and Tong Wu. In that case, the Wuhan court recognized and enforced a California judgment on the basis of reciprocity. It is widely regarded as the first Chinese court decision to recognize and enforce a U.S. commercial money judgment.
The Wuhan decision found de facto reciprocity: U.S. courts had previously recognized Chinese judgments, so the Chinese court was willing to reciprocate.
This does not mean every U.S. judgment will be enforced in China. But it does mean that the blanket assumption that “China will never enforce a U.S. judgment” is no longer true.
The Legal Framework: Reciprocity and China’s Civil Procedure Law
For U.S. judgments, reciprocity is usually the threshold issue. Because there is no U.S.-China judgment recognition treaty, the applicant generally must show that Chinese courts can recognize U.S. judgments on a reciprocal basis.
Chinese courts have become more willing to find reciprocity where courts in the foreign country have recognized Chinese judgments. The Supreme People’s Court’s 2021 Conference Summary on foreign-related commercial and maritime trials addressed recognition and enforcement of foreign judgments, including reciprocity analysis.
Chinese courts and commentators have described this as a move toward de jure, or presumptive, reciprocity. In practical terms, a Chinese court may consider whether Chinese judgments could be recognized under the law of the foreign jurisdiction, rather than requiring proof that a foreign court has already recognized a Chinese judgment.
None of this operates as binding precedent. China is not a common-law jurisdiction, and a successful case in Wuhan, Shanghai, Ningbo, or Guangzhou does not guarantee the same result in the next case. But it is fair to say that Chinese courts have moved from outright skepticism toward a more rule-based, case-by-case recognition practice.
Older U.S.-China JRE cases failed largely on reciprocity grounds. More recent cases have done better as reciprocity has become more established in Chinese court practice.
What Chinese Courts Look For
A U.S. judgment creditor seeking recognition and enforcement in China should expect the Chinese court to focus on five core issues.
Is the U.S. judgment final and effective?
Chinese courts generally will not enforce a judgment unless the applicant that its U.S. judgment is final and effective. In one 2020 Wuxi case, enforcement was rejected because the applicant failed to establish that the U.S. judgment was final and no longer subject to ordinary appeal.
In the United States, a signed judgment may feel like the end of the case. For China enforcement, it is only the starting point. The judgment creditor should be prepared to prove finality with usable documentation, such as docket materials, certificates, appellate status records, or other court documents showing the judgment is final, enforceable, and no longer subject to ordinary appeal.
A judgment that is enforceable under U.S. law is not automatically self-proving in China. The Chinese court will want a clean record.
Was the defendant properly served?
Service is often the issue that kills international enforcement.
f the defendant is in China, service of U.S. proceedings generally must be handled through proper international channels, usually under the Hague Service Convention. Shortcuts that may seem harmless in the U.S. case can become fatal in a later China enforcement proceeding.
If you want service to satisfy what Chinese courts require under the Hague Service Convention, do not rely on Article 10 mail service. China has expressly objected to Article 10 service, so Hague-compliant service in China takes time and should be built into the litigation plan from the start.
If service was defective, a Chinese court will likely refuse recognition on due process grounds. If the judgment is a default judgment, the service record becomes even more important.
This is one of the most common mistakes in cross-border litigation: the plaintiff wins the U.S. case but builds a record too sloppy to enforce overseas. It is one of the main reasons our law firm turns down foreign judgment enforcement matters for China and many other countries. It is also one of the primary defenses we use to oppose enforcement of foreign court judgments in the United States.
The bottom line is simple: if you are suing a foreign defendant anywhere in the world, retain counsel from the outset who understands international litigation.
Did the U.S. court have proper jurisdiction?
Chinese courts will also consider whether the U.S. court properly exercised jurisdiction. This does not mean the Chinese court will relitigate the entire U.S. case. But if the U.S. court’s jurisdiction looks weak, manufactured, or inconsistent with Chinese recognition principles, enforcement becomes harder.
This issue is especially important in contract cases. Forum selection clauses, governing law clauses, consent-to-jurisdiction provisions, service provisions, and the defendant’s contacts with the forum should all be documented with later enforcement in mind.
A judgment creditor is in a stronger position when the defendant agreed to the forum, received proper notice, had a meaningful relationship to the transaction, and had a fair opportunity to appear. If jurisdiction rests on thin contacts or procedural shortcuts, expect trouble.
It also helps to have the U.S. court clearly explain its basis for exercising jurisdiction over the foreign defendant. We often instruct litigation counsel to ask the court to do this, and courts usually will. We have also requested litigation counsel go back to the judge after judgment to request a fuller explanation of the jurisdictional basis, and courts generally agree to provide one.
Did the defendant receive due process?
Chinese courts will review whether the defendant was lawfully summoned and had a reasonable opportunity to present arguments. A default judgment can still be enforced, but the record must show notice and an opportunity to appear.
Default judgments are not easy to enforce in China. But they can be enforced if service, notice, jurisdiction, and finality are clean.
Many U.S.-China JRE matters involve default judgments because Chinese defendants frequently decline to appear in U.S. proceedings. A defendant’s decision not to appear in the U.S. case does not by itself defeat enforcement in China. But the judgment creditor must be able to prove the defendant had a legally adequate chance to participate.
Would enforcement violate Chinese public policy?
Chinese courts can refuse recognition if enforcement would violate the basic principles of Chinese law, China’s sovereignty, security, or public interest. In ordinary commercial money judgment cases, this is usually not the main problem unless the judgment includes something Chinese courts view as incompatible with Chinese law.
Punitive damages are where this issue most often comes into play.
In several Guangzhou Intermediate People’s Court cases involving U.S. EB-5 visa fraud judgments, the Chinese court recognized and enforced compensatory or special damages but declined to enforce punitive damages.
If your U.S. judgment includes actual damages, statutory interest, litigation costs, and punitive damages, do not assume the entire judgment will be enforced in China. Chinese courts may enforce the compensatory portion and reject the punitive portion. The good news is that Chinese courts generally appear willing to separate the two, rather than reject the entire judgment simply because part of the award is punitive.
The judgment creditor should separate and document damages carefully. If the U.S. judgment lumps together actual damages, punitive damages, interest, attorneys’ fees, and costs without clarity, the Chinese enforcement case becomes harder.
The better approach is to make the U.S. court record as enforcement-friendly as possible. Actual damages should be clearly identified. Interest should be clearly calculated. Fees and costs should be separately supported. Any punitive component should be separately stated so the Chinese court can recognize the enforceable portion without having to untangle the award.
When Does It Make Sense to Enforce a U.S. Judgment in China?
Our law firm has handled and is currently involved in a number of U.S.-China judgment recognition and enforcement matters. But most U.S. judgments we are asked to enforce in China do not make economic sense to pursue there.
Enforcement in China is slow, expensive, document-heavy, and uncertain. The bigger issue is not whether the judgment can be enforced in China, but whether enforcing it makes business sense.
It is not uncommon for it to cost more than $50,000 just to gather the necessary U.S. court documents, secure critical declarations, notarize documents, obtain the required apostilles, and manage professional translations. And all of that is only to assemble the package needed to ask a Chinese court to consider the case.
China’s Apostille Convention entered into force with the United States on November 7, 2023, and U.S. public documents within the scope of the Convention generally need a U.S. apostille rather than Chinese consular authentication. That is an improvement over the old consular authentication process, but it does not make document preparation cheap or simple. That document-preparation cost comes before China counsel, court filings, asset investigation, translation work, strategy work, enforcement proceedings, and the time required to move the case through the Chinese court system.
The amount at stake
Unless there is at least $1 million on the line, the numbers rarely work to take a U.S. judgement to China. The cost of admission for a China enforcement action is too high for most smaller claims.
A $1 million judgment with strong proof of proper service, a final and enforceable judgment, no pending appeal, clear compensatory damages, a solid jurisdictional record, and identifiable assets in China may be worth considering. A $1 million judgment with messy service, uncertain assets, punitive-heavy damages, or unresolved appeal issues usually will not justify the cost and risk.
The best case is both large and clean.
The quality of the case
A large judgment is not enough. The case also needs to be legally and procedurally suitable for China enforcement. A good candidate usually has a clean U.S. court record, proper service, clear jurisdiction, finality, compensatory damages that can be separated from any punitive award, and a realistic path to assets in China. A weak candidate usually has the opposite: questionable service, unresolved appeals, unclear damages, weak jurisdictional facts, no known assets, or a judgment that depends heavily on punitive damages.
A U.S. judgment that is emotionally satisfying but procedurally sloppy may be worthless in China. A smaller judgment with clean service, clean damages, and known assets may be far more collectible.
These cases are difficult, expensive, time-consuming, and still relatively new in practical terms. Even a strong judgment can take a long time to enforce, and there are uncertainties at every stage.
China enforcement can be a powerful tool, but it is not for every case. It usually makes sense only when the amount at issue is large enough, the judgment is strong enough, and there are realistic assets in China worth pursuing.
For that reason, we almost always recommend starting with due diligence on the defendant. Before spending heavily on a China enforcement filing, the judgment creditor should get at least some sense of whether the defendant can pay the judgment. This initial research is far less expensive than preparing the filing itself, and it often changes the analysis.
Our law firm frequently conducts this research. I estimate that at least 25 percent of the time, our findings alone lead the U.S. judgment creditor to decide not to proceed further.
Building the U.S. Case for China Enforcement
The biggest mistake is waiting until after the U.S. judgment to think about China. By then, it may be too late to fix service defects, jurisdictional weaknesses, unclear damages findings, or a poor finality record. If the defendant’s assets are likely to be in China, the plaintiff should plan the U.S. case around eventual China enforcement.
1. Use enforceable contract language before the dispute arises
A strong dispute resolution clause should address forum, governing law, service, jurisdiction, and remedies. If China assets are likely, the clause should be drafted with China enforcement in mind, not just U.S. litigation convenience.
In our China contracts, we virtually never call for disputes to be resolved in a U.S. court when the Chinese side’s assets are likely to be in China. This is because even if you win in the United States, you still need to spend significant time and money taking that U.S. judgment through recognition and enforcement proceedings in China. That added step can change the entire economics of the dispute resolution clause.
And Chinese companies understand this. A contract that requires disputes to be resolved in a U.S. court does not worry a China-based counterparty nearly as much as the U.S. side assumes, because the Chinese company knows the judgment still has to be enforced in China before it can reach China-based assets. See Choosing the Jurisdiction for Your China Contract Disputes and Why Your China Manufacturing Agreements Should Almost ALWAYS Be in Chinese.
2. Serve the defendant properly
Do not improvise international service. If service must comply with the Hague Service Convention, build that time and cost into the litigation plan. A fast default judgment will usually be far less valuable than a slower judgment supported by a service record a Chinese court will respect.
3. Create a clean record
The Chinese court will not want a messy U.S. docket. The judgment creditor should be able to present a coherent package showing the complaint, proof of service, jurisdictional basis, defendant’s opportunity to respond, final judgment, appellate status, damages calculation, and enforceability.
4. Separate damages categories
Actual damages should be clearly distinguished from punitive damages. Interest, attorneys’ fees, and costs should be separately supported. The easier it is for the Chinese court to identify the compensatory portion of the award, the better.
5. Investigate China assets early
A judgment against a China-based debtor is worth more if you know where the debtor’s assets are. Waiting until after judgment may give the debtor time to move assets, restructure, dissolve entities, or make collection harder.
Settlement Leverage: Sometimes the Filing Is the Point
Not every China judgment enforcement matter ends with forced collection. Sometimes the best use of a Chinese recognition proceeding is to gain leverage. A Chinese debtor that ignored U.S. litigation may react differently when the creditor files in China, especially if the debtor has bank accounts, real estate, equity interests, receivables, or operating assets there.
Bottom Line
Chinese courts have recognized U.S. judgments, and the legal framework is more developed than it was a decade ago. But recognition and enforcement remain case-by-case. The companies most likely to succeed are those that plan early, serve properly, build a clean record, separate compensatory damages from punitive damages, prove finality, identify China assets, and use experienced China enforcement counsel.
A U.S. judgment is expensive paper if it cannot reach assets. If the money is in China, the enforcement strategy needs to be built into the U.S. case from day one.
