“24%” the limit of the annual interest in contract according to the Chinese Law

von Wolf M. Nietzer

How many percentages could be or are allowed to be charged according to the Chinese Law, if the parties intend to rate annual interest in their contract? The annual interest might be set e.g. for a loan, other expenses or as compensation of default.

On August 9, 2017 the Chinese Supreme People´s Court has published its “Opinions on Further Strengthening the Financial Judgment” (hereinafter referred to as “Opinions”). Art. 2 of these Opinions stipulates: Concerning financial loan contracts, if the interest of loan, compound interest, liquidated damages and other expenses together demanded by the loaner are extremely high and significant deviated from the actual loss, the people´s court can reduce the payment beyond the range of 24% annual interest upon request of the party liable ...

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