Legal aid for free trade zones to be strengthened

Move to create world-class business environment and advance opening-up

China is strengthening legal support for the development of free trade pilot zones as part of efforts to bolster high-level opening-up and optimize a sound business environment governed by the rule of law, the country's top court said.

The Supreme People's Court on Tuesday underscored the importance of high-quality and efficient legal services in advancing the construction of free trade pilot zones. It disclosed five concluded cases to demonstrate judicial protection for various market entities.

The cases span multiple fields, including international air transportation, China-Europe freight trains and cross-border e-commerce, representing common disputes in free trade pilot zones.

"In handling cases, Chinese judges have fully respected business entities and adhered to the principle of equal protection for every litigant, regardless of their origin," the top court said.

It noted that the legal process also implements a coordinated approach to promote the rule of law both domestically and in foreign affairs.

"Our aim is to regulate the free trade market, prevent risks, ensure the healthy operation of the pilot zones and help build a first-class business environment that is market-oriented, law-based and internationalized," it added.

In one disclosed case, a company in Northeast China's Heilongjiang province sold silk pillowcases on Amazon Germany as part of its cross-border e-commerce business.

Following Amazon's rules, the company stored its products in Amazon's German warehouses.

In April 2021, Amazon asked the company to remove all its goods from the shelves due to platform rules. However, Amazon did not provide cross-border return shipping services, so the company hired another corporation to pick up its 1,936 items and ship them back to China.

The corporation, based in Suzhou, Jiangsu province, outsourced the task to a German enterprise because it did not have its own warehouses in Germany. The German company lost 581 items in the shipping process.

As a result, the Heilongjiang company sued the Suzhou corporation in a Chinese court, seeking more than 75,000 yuan ($10,375) in compensation for the lost goods.

After hearing the case, the Suzhou Intermediate People's Court in Jiangsu ruled in favor of the Heilongjiang company, finding the Suzhou corporation in breach of contract and ordering it to pay 42,840 yuan in damages.

Additionally, the Suzhou court issued a judicial suggestion to a local cross-border e-commerce association, recommending support for enterprises in building overseas warehouses. The move aims to provide effective legal guarantees for the development of new business models in free trade pilot zones.

The top court praised the ruling, stating that "cross-border e-commerce, as a crucial trade form in this digital age, is a significant industry for the development of free trade pilot zones. The utilization of overseas warehouses is also a new trend in the rapid growth of cross-border shopping."

Since the establishment of the first free trade pilot zone in Shanghai in 2012, China has set up 22 such zones, forming a pattern of reform, opening-up and innovation that spans the country's east, west, south, north and central regions, while coordinating coastal, inland and border areas.