CHINA Trends and Developments Contributed by: Greg Hallahan, Amanda Rasmussen and Kristine Kwok, Secretariat
to approximately 6% of cases (with enforcement records comprising most of the remainder). In 2021, with the introduction of the Civil Code, the Personal Information Protection Law and the Data Security Law, tighter requirements for judi - cial disclosure were introduced. As a result, the number of cases released each year has steadily declined again. In 2024, approximately 5.7 million judgments were dis - closed. A majority of judgments related to civil cases (60%), and most of the remainder to enforcement judgments (30%). Sources working in the judiciary interviewed by journalists claimed in response to queries by lawyers that the primary change was that the total number of judgments released by the lower courts had declined, but that authoritative and/ or notable cases heard by the higher courts con - tinue to be released. Since 2022, the names of individuals and entities referenced in most cases are now anonymised, but records prior to 2022 have not been redact - ed (at least not to date). This change may make litigation checks in China challenging going forward, but the understanding is that certain licensed providers will be able to continue to provide litigation checks on individuals and enti - ties for specific purposes, such as due diligence and investigations. Indications of financial distress There is limited value in pursuing an individual or company through the courts if it can be estab - lished that they genuinely do not have the means to pay their debts or suitable compensation, or that there is a long list of secured and unsecured creditors also seeking to be repaid.
Court enforcement judgments can be help - ful for identifying other creditors. In addition, insolvency records, credit blacklists, restricted consumption lists and dishonest debtor lists are useful for establishing the financial status of indi - viduals and entities in China. Bankruptcy and insolvency records Companies subject to insolvency proceedings are included in the National Enterprise Bank - ruptcy and Restructuring Case Information data - base, which provides the: • name of the company; • result of the proceeding; and • total debts (but not usually the names of creditors). China does not have a nationwide personal bankruptcy regime but started piloting systems in various cities from 2019. In March 2021, the Shenzhen Intermediate Court started hearing personal bankruptcy cases against individuals residing in Shenzhen for three consecutive years and by the end of 2024 had settled 350 cases. Restricted consumption lists Where individuals have insufficient assets to fulfil an obligation as part of a court-ordered enforce - ment judgment, they are placed on the restricted consumption list. This means they must not: • travel first class; • stay at high-end hotels and resorts; • purchase real estate or luxury vehicles; • renovate existing properties; • rent Grade A office buildings; • purchase insurance or financial products at a high premium; or • send their children to private schools.
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