Here’s a fact most foreign creditors learn too late: a judgment in your favor is just a piece of paper. Whether you actually get paid depends on one thing — whether the debtor still has assets when the court enforces.
That’s why experienced claimants in China freeze first and litigate second. This guide covers exactly how pre-judgment asset preservation works, what it costs, and how to do it right.
What asset preservation does
Asset preservation is a court order that locks the defendant’s assets — bank accounts, real estate, vehicles, equipment — before or during litigation, so they can’t be transferred or hidden while the case runs. In practice: freeze first, sue second.
Why it’s the single most important move
- It blocks the escape route.Once a debtor learns it’s being sued, moving assets is the first instinct. Preservation closes that window before it opens.
- It creates settlement pressure.A frozen account means payroll and supplier payments stall — debtors routinely come to the table voluntarily to get the freeze lifted. Cases with preservation in place settle at significantly higher rates.
- It maps the assets.Through the court’s online enforcement system, the debtor’s bank deposits, property, and vehicles surface — a roadmap for the enforcement stage.
What you need to apply
Chinese courts require three things:
- A preservation application— identifying both parties, the amount to freeze, and the target assets. Can’t name specific assets? The application can state: “Request the court to inquire into, seize, and freeze the respondent’s property through the online enforcement and control system.”Most courts will run the search for you; a minority require you to supply specific leads, so confirm the practice with the court in advance.
- Security— Chinese courts require security (担保) in exchange for the freeze. The standard form is property preservation liability insurance: a letter of guarantee from an insurer, typically costing only $100–200, universally accepted by Chinese courts. (Alternatives exist — cash deposits or real estate collateral — but insurance is what practitioners actually use.)
- The preservation fee— a court fee, charged on a sliding scale: 1%of the preserved amount up to RMB 100,000, then 0.5% above that, capped at RMB 5,000 (about $700). This fee is a litigation cost: you prepay it, and the losing party ultimately bears it.
How the process runs
In practice, preservation is filed together with the lawsuit. The court notifies you to pay the fee (electronic payment is standard), and implements the freeze within about 15 days of payment — sometimes faster in lighter-caseload courts.
How long the freeze lasts — and the renewal trap
Preservation expires by asset type: bank deposits: 1 year · vehicles and equipment: 2 years · real estate: 3 years.
Critical: apply for renewal one month before expiry. Renewal is free — a one-page application. Miss it, and the assets unfreeze automatically. Long cases routinely fail at this final administrative step.
Two questions everyone asks
“I don’t know what the debtor owns. Can I still apply?” Yes — in most courts. Request a court-run search through the online enforcement system. Some courts don’t support this, so verify before filing.
“What if the preservation turns out to be wrong?” The applicant is technically liable for wrongful-preservation losses — but with preservation liability insurance, the insurer covers claims within the policy limit. In practice, this risk is what the $100–200 premium buys away.
The bottom line
Preservation is fast (about 15 days), cheap (fees capped at ~$700, insurance at ~$150), and it changes the entire dynamics of the case — which is why, at SuitWin, freezing the debtor’s assets is our first move, not a last resort. No warning letters. No time to move assets.
Facing a debtor who might be moving assets? Speed matters more than anything. [Get a free case evaluation →] — we reply within 24 hours, and preservation can typically be underway within days of engagement.
