Product Liability in China

Product liability in China is governed by the Civil Code (Book VII, Tort Liability) and the Product Quality Law (Chanpin Zhiliang Fa, 产品质量法, 1993, amended 2000, 2009, 2018). The legal framework establishes strict liability for defective products, provides for recovery of personal injury and property damage, and allows punitive damages for intentional violations.

The Civil Code Framework

The Civil Code (Articles 1202-1207) codified the product liability rules previously contained in the Tort Liability Law (2009) and the General Principles of Civil Law. Article 1202 provides that a manufacturer shall bear tort liability where a defective product causes damage to another person. The liability is strict — the injured party need not prove fault by the manufacturer.

The Civil Code introduces several important innovations: the expansion of the scope of products covered; the clarification of the relationship between product liability and contractual liability; the express provision for punitive damages (Article 1207); and the improvement of the burden of proof rules.

Defective Products

A product is defective where it has an unreasonable risk of causing personal injury or property damage. The defect may arise from: design defects (where the product’s design creates foreseeable risk); manufacturing defects (where the product deviates from its intended design); or warning defects (where the product fails to provide adequate warnings or instructions about risks).

The injured party must prove: that the product was defective; that the damage was caused by the defect; and the extent of the damage. The burden of proof is on the injured party, but the Civil Code provides certain presumptions. Where the product does not conform to mandatory national standards, it is presumed defective. Where the injured party’s evidence establishes a prima facie case of defect, the manufacturer bears the burden of proving the product was not defective.

Producer and Seller Liability

The manufacturer of the defective product bears primary liability. The seller bears liability where: the seller caused the defect; the manufacturer cannot be identified; or the product was imported by the seller. The seller who pays compensation may seek contribution from the manufacturer.

The injured party may sue either the manufacturer or the seller, or both. The manufacturer may defend by showing: that the product was not put into circulation; that the defect did not exist when the product was put into circulation; or that the state of scientific and technical knowledge at the time the product was put into circulation was not such as to enable the discovery of the defect.

Strict Liability

Product liability under the Civil Code is strict — the injured party need not prove fault. The manufacturer is liable for damage caused by the defective product unless it can establish one of the statutory defenses. The strict liability regime reflects the policy that manufacturers, who benefit from the sale of products and have the capacity to control product safety, should bear the cost of product-related injuries.

The strict liability regime does not apply to economic loss alone. Where the defective product causes only economic loss (damage to the product itself or consequential economic loss), the injured party’s remedy is governed by the contract between the parties — typically through warranty claims under the Civil Code’s sale of goods provisions.

The Sanlu Melamine Milk Powder Case

The Sanlu melamine milk powder case (2008) was the most significant product liability disaster in Chinese history. Sanlu, a major dairy company, deliberately added melamine to infant milk powder to inflate protein content readings. The adulteration caused kidney damage in over 300,000 infants, including fatalities.

The case resulted in: criminal prosecution of Sanlu executives (including the death sentence for the former chairwoman); the bankruptcy of Sanlu; the recall of millions of products; and the implementation of comprehensive food safety reforms, including the Food Safety Law (2009, revised 2015). The case highlighted the failures of China’s product safety regulatory system and led to significant improvements in food safety enforcement.

Toyota Acceleration Cases

The Toyota acceleration cases (2010-2012) involved claims by Chinese consumers that Toyota vehicles had unintended acceleration defects. Toyota recalled over 170,000 vehicles in China and faced civil litigation from affected consumers. The Chinese courts handled the cases under the product liability provisions of the Tort Liability Law.

The cases raised issues of: the standard for proving design defects in complex products; the role of regulatory investigations in product liability litigation; the calculation of damages in product liability cases; and the relationship between recalls and liability. The Toyota cases contributed to the development of Chinese product liability law for automotive defects.

Consumer Rights

The Consumer Protection Law (1993, amended 2013, 2023) provides additional protections for consumers injured by defective products. The Law establishes: the right to safety; the right to information; the right to choice; the right to fair dealing; and the right to compensation. The 2013 amendment introduced punitive damages for fraudulent conduct (three times the loss) and for knowingly supplying defective goods or services (two times the loss).