In terms of litigation exposure, managers of Chinese companies used to feel bullet proof. At home in China, consumer rights were, for all intents and purposes, non-existent. Commercial disputes with other Chinese companies were all handled by appeal to the relevant government departments; whomever had the best guanxi (relationships) won. Abroad, Chinese companies were protected by the lack of treaties on the mutual recognition and enforcement of foreign court judgments (only a handful of leading jurisdictions, for example, France, Poland, Italy, Spain and Russia, together with scores of commercially less important countries, have reciprocal enforcement agreements with China) and by the paucity of Chinese company assets outside China against which a foreign judgment could be enforced internationally.
No longer who you know
This is all changing. Litigation exposure in China will never rival the US or Europe – both the frequency of litigation and the amount of damage awards are, and...