Selling products in China exposes foreign companies to product liability risks. Understanding Chinese product liability law is essential for protecting your business and responding appropriately to claims.
Legal Framework
Product liability in China is governed by:
- Product Quality Law
- Consumer Rights Protection Law
- Tort Liability Law (Civil Code)
- Food Safety Law (for food products)
Who Can Be Held Liable?
- Manufacturers: Primary liability for defects
- Sellers: Can be liable, especially if manufacturer unknown
- Importers: Treated as manufacturers for foreign products
Key Point: For imported products, the Chinese importer is often the first target of liability claims, but foreign manufacturers can also be pursued.
Types of Defects
- Design defects: Inherent flaws in product design
- Manufacturing defects: Errors in production
- Warning defects: Inadequate instructions or warnings
Liability Standards
Strict Liability
Manufacturers face strict liability—no need to prove negligence. If the product is defective and causes harm, liability attaches.
Fault-Based Liability
Sellers are liable if they're at fault (knew or should have known of defect).
Damages Available
- Medical expenses
- Lost income
- Property damage
- Disability compensation
- Death compensation
- Punitive damages (in serious cases)
Product Recalls
China has mandatory recall requirements:
- Companies must report known defects
- Regulators can order recalls
- Failure to recall can result in penalties
- Recall costs are company's responsibility
Protecting Your Business
Before Selling
- Ensure products meet Chinese standards (GB standards)
- Obtain required certifications (CCC, etc.)
- Proper Chinese labeling and warnings
- Product liability insurance
Contractual Protections
- Indemnification clauses with distributors
- Quality control requirements
- Clear allocation of liability
If a Claim Arises
- Take the claim seriously
- Preserve evidence
- Investigate promptly
- Engage local legal counsel
- Consider settlement vs. litigation
Regulatory Enforcement
Beyond civil liability, regulators can impose:
- Fines
- Product seizure
- Business license revocation
- Criminal liability (in serious cases)
Facing a Product Liability Issue?
I help foreign companies navigate product liability claims and regulatory issues in China. Get experienced legal support.
Contact MeDisclaimer: This article is for informational purposes only and does not constitute legal advice. For advice on your specific situation, please contact me directly.
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