China is seeking cooperation from foreign law enforcement
establishments to help pursue foreign investors who leave the
country without properly liquidating their assets and winding up
their business operations in China. According to Xinhua
News, the number of foreign investors who have left China
without properly winding up their China operations is on the rise
in recent years. Most of these investors operate small and
labor-intensive businesses. When the foreign-invested businesses
become unprofitable, some investors simply disappear and leave
behind their capital equipment along with unpaid debts and unpaid
On December 19, 2008, the Chinese government issued an official
policy to address the abandonment issue created by these foreign
investors. The official policy is entitled "Implementation
Guidelines Regarding Irregular Withdrawal of Foreign Investment and
Cross-Border Litigation to Protect Chinese Interests." This
implementation guideline is jointly issued by the Ministry of
Commerce, the Ministry of Foreign Affairs, the Ministry of Justice,
and the Ministry of Public Security. The Chinese government wants
to use Chinese laws and bilateral treaties, including extradition
treaties to pursue those foreign investors who have injured Chinese
interests through the illegal abandonment of business
The crux of the working guidelines is that the claimant files
its claim against the foreign investor in a Chinese court. After
obtaining a judgment from a Chinese court, the claimant may then
petition the local law enforcement authorities in the relevant
foreign jurisdictions to satisfy the judgment. In cases involving
criminal activities or intentional tax evasion of a large sum, the
Chinese government may seek extradition to prosecute the suspects
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