If a Chinese counterparty may one day owe you money, the decisive question is not whether you can win — it is whether you can collect. Here the law draws a hard line. A foreign arbitral award is readily enforceable in China through the New York Convention, with courts enforcing close to nine in ten in the last decade. A foreign court judgment is far harder — enforceable only under a bilateral treaty or on the basis of reciprocity. That gap should shape how you draft your dispute clause today, long before any dispute arises.
- Awards — the reliable route: China has been a New York Convention member since 1987; its courts recognised or enforced roughly 91% of foreign arbitral awards in 2012–2022, many within about six months.
- Where and when: apply to the Intermediate People's Court where the respondent is domiciled or holds assets, within a two-year limitation period.
- Narrow refusal grounds: refusal tracks Article V of the Convention, and a court minded to refuse must report the case up to the Supreme People's Court first — a genuine check on local resistance.
- Judgments — the hard route: a foreign judgment is enforceable only under a bilateral treaty (30+ countries, including France, Italy and Spain) or on reciprocity; the US and UK have no treaty with China.
- 2024 reform: the amended Civil Procedure Law (effective 1 January 2024) and recent Supreme People's Court guidance moved China from strict "de facto" to broader "legal" reciprocity — an opening, not a guarantee.
- Upshot: where the counterparty or assets sit in China, choose arbitration with a clean clause over foreign-court litigation.
The one distinction that decides your enforcement strategy
The difference is structural. Arbitral awards travel on a single multilateral treaty — the 1958 New York Convention — that binds more than 170 states to enforce each other's awards on near-identical terms. A German, French or US award and a Chinese enforcement court are plugged into the same framework. Foreign court judgments have no equivalent. China enforces them only where a bilateral treaty or reciprocity supplies the bridge, and that bridge is a patchwork: present with some countries, absent with others, and still developing in the places that matter most to Western business. Choose your dispute mechanism with that asymmetry in mind, and you are choosing whether a future win is collectible.
Foreign arbitral awards: the New York Convention route
China acceded to the New York Convention in 1987, with the two standard reservations: it applies the Convention only to awards made in another contracting state (the reciprocity reservation) and only to disputes considered commercial under Chinese law (the commercial reservation). For a European or US company arbitrating a commercial contract, both boxes are almost always ticked.
The mechanics are settled. You apply directly to the Intermediate People's Court at the place where the party you are pursuing is domiciled or where its assets are located. The limitation period is two years, running from the last day for performance stated in the award (or, where none is stated, from the day after the award is served) — a window that is easy to lose track of and worth diarising the moment you have an award. The record is encouraging: an empirical review of the decade to 2022 found Chinese courts fully recognised and enforced around 91% of the foreign awards brought before them, with a meaningful share decided within roughly six months. That is a materially better outcome than many foreign parties expect, and it is the core reason arbitration is the default recommendation for China-facing contracts. See our dispute resolution practice for how we run enforcement from award to recovery.
Narrow grounds to refuse — and the reporting system behind them
A Chinese court does not re-try the merits. Its grounds to refuse enforcement track Article V of the New York Convention and are deliberately narrow: no valid arbitration agreement; a party not given proper notice or a fair chance to present its case; an award going beyond the scope of what was submitted; an improperly constituted tribunal or irregular procedure; an award not yet binding, or set aside or suspended at the seat; a subject matter not arbitrable under Chinese law; or a conflict with Chinese public policy. Public policy in particular is applied sparingly, not as a catch-all.
Backing these narrow grounds is a structural safeguard foreign parties often miss: the internal reporting system. Before an Intermediate Court may refuse to recognise or enforce a foreign or foreign-related arbitral award, it must report the case up through the Higher People's Court to the Supreme People's Court, which effectively decides. That level-by-level review is designed to curb local protectionism and keep enforcement outcomes consistent nationwide — a meaningful reason the success rate stays high.
Foreign court judgments: treaty or reciprocity
Judgments are a different world. Under the Civil Procedure Law, a foreign judgment can be recognised and enforced in China on one of three bases: an international convention China has joined, a bilateral treaty, or reciprocity. China has bilateral judicial-assistance treaties covering judgments with more than 30 countries — several European civil-law jurisdictions among them, including France, Italy and Spain. But there is no such treaty with the United States or the United Kingdom, so judgments from those courts fall to reciprocity — historically the slowest and least certain path of all. For a US or UK company that litigated to victory abroad and then discovered the assets are in China, this is where enforcement can stall.
The 2024 reform: reciprocity is opening, slowly
The direction of travel is positive, and worth understanding precisely rather than overstating. For years China applied strict "de facto" reciprocity: it would enforce a country's judgments only if that country had already, in a decided case, enforced a Chinese one — a chicken-and-egg problem that stranded many judgments. A landmark Supreme People's Court conference summary issued at the end of 2021, followed by the 2023 amendment to the Civil Procedure Law (effective 1 January 2024), reshaped that test. China now recognises broader "legal" reciprocity, established where the foreign country's own law would allow a Chinese judgment to be enforced (de jure reciprocity), or where there is a diplomatic or judicial understanding, or a reciprocal commitment. The amended law also codified clearer refusal grounds — lack of jurisdiction of the foreign court, defective service or denial of a fair hearing, fraud, a conflicting Chinese judgment, and public interest.
The practical caveat: this remains a case-by-case assessment decided by the enforcing court, not an automatic gateway like the New York Convention. It is a real and welcome opening, but it does not close the gap with arbitration — it narrows it.
What this means for the contract you sign now
The enforcement asymmetry is not something to manage after a dispute; it is something to lock in at signing. Where your counterparty or its assets are in China, arbitration with a properly drafted clause is usually the safer route precisely because the award will be far more readily enforced than a foreign judgment. The catch is that the benefit is only as good as the clause: the wrong seat, a vague or "pathological" institution, or a scope that does not cover the dispute can undo the advantage. We set out how the clause you sign upfront decides enforceability later in the arbitration clause that decides your China contract, and this analysis also informs how we structure protection in cross-border M&A. Get the clause right on day one, and enforcement becomes a process you can rely on rather than a fight you may not win.
Frequently asked questions
Yes. China has been a party to the New York Convention since 1987, and its courts recognised or enforced roughly 91% of foreign arbitral awards in the decade to 2022. You apply to the Intermediate People's Court where the respondent is domiciled or holds assets, within two years of the award.
It is possible but much harder than enforcing an arbitral award. Neither the United States nor the United Kingdom has a judgments treaty with China, so their judgments depend on reciprocity. Since the reforms effective 1 January 2024 China assesses reciprocity more openly, but enforcement remains case-by-case and far less predictable than the New York Convention route.
Two years. The limitation period generally runs from the last day for performance stated in the award, or, if none is stated, from the day after the award is served on the parties. Miss the window and you can lose the right to enforce, so diarise it as soon as you hold the award.
The grounds track Article V of the New York Convention — no valid arbitration agreement, a party not given proper notice, an award exceeding the scope of the submission, an irregular tribunal or procedure, an award not yet binding or set aside at the seat, non-arbitrability, or public policy. They are narrow, and a court minded to refuse must report the case up to the Supreme People's Court first.
For most foreign companies with a counterparty or assets in China, arbitration is the safer choice precisely because awards are far more readily enforced there than foreign judgments. The gain depends on a clean arbitration clause — the right seat, institution and scope — agreed at signing, not improvised after a dispute arises.
Sources
- Kluwer Arbitration Blog — Recognition and enforcement of foreign arbitral awards in China 2012–2022 — empirical review reporting the ~91% full recognition/enforcement rate.
- China Justice Observer — China introduces new reciprocity rules for enforcing foreign judgments — the shift from de facto to de jure reciprocity and the three reciprocity tests.
- DLA Piper — The 2023 amendments to the PRC Civil Procedure Law — effective 1 January 2024, including the framework and refusal grounds for foreign judgments.
- Internal: The arbitration clause that decides your China contract; Dispute resolution.
This article is general information for foreign companies, not legal advice on any specific matter. Rules and practice change; please take advice on your facts.