It is extremely important to understand the language, customs, cultures, and laws that govern a country in order to conduct business there - including debt collection. It is often necessary to involve people who are familiar with the area in order to successfully collect debts in a foreign country. Particular methods and techniques often depend on the culture in the area. A combination of legal action and political influence is often the most effective way to successfully recover debts in China.
Since many US firms do business directly with Chinese firms, hard-to-collect debt is on the rise. Additionally, as more and more Chinese nationals visit the United States, there will be more and more bad debts that need specialized collection services. Chinese visitors may incur debt for rental cars, medical care, or commercial purchases.
Over the years, debt collection efforts in China have become more and more consistent. The best way to collect is to work with a company that is local to the area. Since 1995, only Chinese law firms can actually collect a debt. Non-law firms could no longer make collections due to regulations imposed by the State Administration for Industry and Commerce and the National Public Security Bureau.
Often, legal means are employed. It is here that a good China law firm is needed. Political and social pressures are also often effective. With the knowledge and connections of a good Chinese lawyer, the right pressure can usually be brought to bear on the debtor without having to go to court or arbitration.
In China, debt collection agencies follow general recovery actions. Calls and visits are made to the debtor to discuss payment options. Increasing the debtor's awareness of the debt as well as the debtor's relatives is also a well-used practice. In the past few years, China has begun to build a solid foundation for debt collection. Its efforts and results are improving.
