You can freeze a Chinese company's bank accounts, receivables, real estate or equity before or during a lawsuit, and Chinese courts grant these orders routinely and quickly. Security used to be the main obstacle: courts traditionally asked for cash of up to 30% of the amount to be frozen, so freezing RMB 1 million meant putting up RMB 300,000. Today, in the great majority of cases, security is provided instead through a litigation property preservation liability insurance policy, which most courts accept and which costs only a small fraction of the amount frozen. The harder questions are what to freeze, how much, and whether freezing will get you paid or simply push the debtor under.
Most creditors come to us wanting the other side's bank account frozen. Before choosing targets, we want to know two other things: what the debtor actually owns that a court can reach, and what the freeze will cost you if it turns out to be wrong. In our experience, preservation decides more debt cases than the judgment does. A defendant with frozen assets settles; a defendant who has had three months' warning often has nothing left to enforce against.
Before or after filing: two kinds of preservation
Preservation during litigation is the ordinary route. Once the case is filed, you apply to the court hearing it, and the court may order the freezing, seizure or sealing of the defendant's property to secure a future judgment (Civil Procedure Law, Art. 103). Under the Supreme People's Court's rules, the security you must provide generally does not exceed 30% of the amount to be preserved, and in cases where the facts are clear and the risk of error is low, a court may reduce or waive it. As explained below, that security is now usually provided by an insurance policy rather than cash.
Pre-action preservation is for urgency: when waiting to file would allow the debtor to move assets out of reach. You apply to the court where the property is located, where the respondent is domiciled, or which has jurisdiction over the case; the court must rule within 48 hours; and you must then file suit or arbitration within 30 days, or the freeze is lifted (Art. 104). For pre-action preservation, the rules require security equal to the full amount you want frozen, although this too can generally be provided by insurance.
Our view: if you can file the lawsuit within a few days, file and apply for preservation at the same time. Courts in most cities process in-litigation preservation quickly, you avoid the 30-day clock of pre-action preservation, and insurers and courts are generally more comfortable with an application backed by a filed claim. Pre-action preservation is worth using when there is a concrete sign that assets are about to move, such as a sale of property, an announced restructuring, or a counterparty that has stopped answering the phone.
Security in practice: insurance, not cash
Many overseas clients hear "30% security" and assume they will have to tie up a large amount of cash for the life of the case. That was the traditional position, and it is still what the rules describe, but it is no longer how most preservation applications are made. The mainstream practice now is to buy a litigation property preservation liability insurance policy (诉讼财产保全责任险) from an insurer, which issues a guarantee letter to the court. The Supreme People's Court's preservation rules expressly allow this, and the great majority of courts accept it.
The cost is modest. The premium is typically only a fraction of one per cent of the amount frozen, so the cash burden of preservation largely disappears. Insurers will review the claim before issuing a policy, and for an overseas claimant the policy is usually arranged through Chinese counsel and can often be in place within a few days. A bank guarantee or cash deposit remains available where a court or case calls for it, but in most commercial cases we would start with insurance.
The security is there for a reason. If the preservation application proves to be wrong, the applicant must compensate the respondent for the loss caused (Art. 108). Courts do not treat losing the case as automatically meaning the application was wrong, but freezing far more than the claim, or freezing assets you knew belonged to someone else, is exactly the kind of error that leads to a damages claim.
What to freeze: think like the enforcement judge
An application must identify the respondent, the amount, and either specific property or concrete leads to property. Courts can search bank accounts and registered assets through the national online enforcement inquiry system, and many courts will do so for in-litigation preservation even if you only provide leads. But what you ask for still shapes the result.
Bank accounts are the obvious target and often the least rewarding: a freeze catches whatever balance is there on the day, which may be very little, and the debtor's customers then start paying into a different account. Receivables owed to the debtor by known customers, real estate, vehicles, and equity in subsidiaries are often more valuable and harder to hide. Before applying, collect what you can: the debtor's registered details and shareholdings from the National Enterprise Credit Information Publicity System, its major customers from invoices and shipping records, and any property it has pledged.
There is a tempting tactic: freeze the debtor's main operating account for far more than your claim and wait for a quick payment. It sometimes works, but it can also stop the business, push it towards bankruptcy, where you become one unsecured creditor among many, and expose you to a claim for excessive preservation. Courts are required to avoid preserving more than necessary and to limit the impact on a business's normal operations.
Arbitration and foreign claimants
If your contract provides for arbitration in mainland China, preservation is also available: the application is made through the arbitral institution to the competent court, and under the amended Arbitration Law in force from 1 March 2026, a party may in urgent cases apply to the court directly before arbitration begins. Arbitration seated in Hong Kong and administered by a qualifying institution can use the 2019 Mainland–Hong Kong Arrangement on interim measures. For arbitration seated elsewhere, such as Singapore or London, mainland courts generally do not grant preservation before an award is recognised, which is one of the most practical reasons to think carefully about the dispute clause at the contract stage.
Foreign claimants also need their paperwork ready early: a power of attorney for Chinese counsel and corporate documents, notarised and apostilled or legalised as required, can take one to three weeks to prepare. If you think a dispute is coming, start that paperwork before you need it.
Frequently asked questions
- Can I freeze a Chinese company's bank account before suing? Yes, through pre-action preservation, if the matter is urgent. The court rules within 48 hours, you must usually provide security for the full amount, and you must sue or start arbitration within 30 days.
- Do I have to put up 30% in cash? Usually not. The rules set security at up to 30% of the amount frozen after filing, and the full amount before filing, but in most cases this is now provided through a litigation property preservation liability insurance policy, which most courts accept and whose premium is only a fraction of one per cent of the amount frozen.
- What if I don't know where the debtor's assets are? Provide whatever leads you have. Courts can search bank accounts and registered property through the online enforcement inquiry system, particularly after the case is filed.
- What happens if the freeze was wrong? The applicant must compensate the respondent for losses caused by a wrongful application, which is why the amount and targets should be chosen carefully.
Related service: Claims Against Suppliers: Demand Letters, Arbitration & Litigation ↗
Preservation is where debt cases are usually won.
We can assess the debtor's assets and the strength of your claim, prepare the preservation application and security, and file the lawsuit or arbitration so that the freeze and the claim move together.
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- Chinese Supplier Breached the Contract: What Can a Foreign Buyer Do?
- Enforcing a Foreign Judgment or Arbitral Award in China: What Works in 2026
- Suing a Chinese Company in a Chinese Court: What Foreign Businesses Should Expect
This article is general information about PRC civil procedure as of 28 September 2026 and does not constitute legal advice. Security requirements, timing and practice vary between courts, and whether preservation is appropriate depends on the claim, the evidence and the respondent's assets.