Litigation is not a preferable course of action in the PRC, especially when the above-mentioned avenues have not yet been exhausted. It must be emphasized that traditionally civil litigation is never a significant element in the Chinese legal system. The emphasis on social harmony and fulfillment of moral obligations tend to discourage civil litigation in favor of conciliation and mediation carried out informally. As mentioned previous, even if parties choose litigation, the parties are still actively encouraged to resolve their difference through mediation or conciliation.
Although, in general, Chinese are adverse to litigation, there is nothing stopping parties to go to court. In fact, in recent time, increasingly, people are turning to the courts for remedies. And courts tend to be more active in civil and economic dispute.
Structures are definitely being put in place to make litigation viable in the PRC. Indeed, on the surface, the procedures and format of trail would not be unfamiliar to a foreign lawyer; but appearance can be deceptive.
Foreign investors in choosing the option of litigation should be aware of the potential downside inherent in litigation in the PRC.
The current court system in the PRC is arguably not well equip to serve the ends of justice particularly as understood by the foreign investors. A fundamental problem is the lack of people with adequate basic knowledge of the law. There is a severe shortage of well-qualified legal personnel in the PRC. Judges often had little training; when the court system was first established, the position of judges are often filled by the rank and file of party members, administrative arm of the government and military attaches. But these very people are more often than not ignorant of the law and legal matters.
It is only in 1983 that...