For one month during the year, the factories in China grind to a complete stop. The country is considered to be the world’s largest exportation powerhouse. Meaning, they make the rules when it comes to what gets made and when. As China uses the lunar calendar, it puts the most significant Chinese holiday smack in the middle of many importers busiest production season. Chinese New Year is a beautiful tradition that can, unfortunately, lead to an array of problems. Some of which can leave you scrambling to protect yourself and your product in a foreign legal process.
By land or by sea
Beacon Economics found that a majority of imports from China came through two main ports; one in Los Angeles and the other in Long Beach. The amount of merchandise that entered the country from these ports alone totaled approximately $162.7 billion. This number fails to take into account the estimated $20.3 billion in Chinese imports that arrived at Los Angeles International Airport. Not only does production take a hit during the New Year but quality can as well. If the blow is big enough, some importers can find themselves fighting with manufacturers in a Chinese courtroom.
After filing a complaint, most civil lawsuits can be dealt with in the basic people’s courts and if necessary, appealed to the intermediate people’s court. The general limitation period for civil claims is three years. However, there is a one-year limitation period in the following instances:
- Sale of a substandard item
- Delay in, or refusal to pay rent
- Loss or damage to property left in the care of another person
China’s cheap cost of labor and logistical infrastructure keep importers coming back. While it seems like a one-month layoff is a small price to pay, consider the legal ramifications of dealing with Chinese productions post the CNY chaos. The ins and outs of the Chinese judicial system are complex and hard to navigate. Ultimately the choice comes down to one question; do the risks outweigh the benefits?