New Approach to Resolving Trade Dispute with China Factory: Reporting to Local Government Authorities

When faced with a trade dispute involving a China factory, filing a lawsuit is rarely the preferred option. Legal action can be costly and time-consuming. I have been considering effective and creative solutions for resolving disputes based on my experiences assisting overseas clients in managing their issues with Chinese factories.

In the previous article, I highlighted that a demand letter is one of the important tools for resolving issues. I want to clarify that a demand letter is not a threat; rather, it is a serious negotiation tool. I plan to discuss how to write a demand letter in another legal article. Additionally, based on my real legal experiences, I believe we can explore a new approach to address disputes beyond just using demand letters.

I would like to share an example to illustrate my point. This year, I took on a case involving a Chinese supplier that failed to deliver products to my client after receiving payment. In this situation, sending a demand letter is a reasonable first step. However, I also reported the case to the local governmental authority where the defaulting factory is located. I strongly recommend submitting a written report for this purpose. Alternatively, you can also reach out to the governmental authority directly by phone.

After two days, I received a call from the government authority, and they requested some details about the case. They informed me that they would intervene and help mediate between the parties involved. In China, government authorities hold significant power, so in certain cases, we can seek their assistance. Ultimately, the dispute was successfully resolved.

Reporting to a governmental authority can be an effective way to help resolve trade disputes, and it is important not to overlook this option. Additionally, sending a demand letter and reporting the issue to the governmental authority can be done simultaneously.

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Contact us:

Jack Meng, is a Chinese lawyer practicing in a Shanghai law firm.

finlandlove@outlook.com