In 2010 a new Tort Liability Law was introduced in China, which specifically deals with product liability. China has been faced with booming economic growth and, in this context, there have been a number of product liability episodes in the last few years, ranging from infant formula tainted with melamine to escalators unexpectedly reversing direction. Such product liability issues have prompted stronger governmental oversight and harsher punishment for those responsible.

The extent of potential product liabilities for Producers and Sellers is an important aspect to take into account when operating in the PRC. Any company producing or selling in the PRC should allocate sufficient resources towards monitoring product quality and establishing effective product distribution channels to mitigate the risk of such liabilities arising. Such companies should also have plans in place for product recalls, product liability litigation and even for public relations crisis management.

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