There's nothing like having to show up in court in a place where you really don't know the rules and maybe can't even understand the language. I think it's fair to say that the court system in China, while it may be improving, is not as transparent as most Western judicial systems. The most common answer to that dilemma is arbitration.

But are you really ready for arbitration? Brad Luo at the China Business Law Blog posted a good piece on Friday that can help you decide.
The CBLB article asks some basic questions that you should be able to answer by simply looking at the contract you have with your Chinese partner. For example, does your contract clearly state that arbitration will be the means to resolve disputes? Does the document spell out details of arbitration like where the arbitration will take place, how the arbitrator will be selected, and what language arbitration will be carried out in?

Brad's article has a few other helpful hints. For example, there are some things that can't legally be addressed through arbitration in China. Brad tells you what some of those things are. You can read his article here.

Having a good contract (and a good arbitration clause) might help you avoid the sort of joint venture nightmares we've discussed recently.