Last year 990 'dangerous' Chinese products were identified within the European market and, with recent safety fears over cars, 'toxic' leather sofas, baby milk and ongoing issues with Chinese-imported toys, it sometimes feels as though the regulators are fighting a losing battle.

However, China is now the European Union's main import trading partner. While this means that, inevitably, recalls are more likely to involve goods imported from China, some major changes to legislation and a number of high-profile cases offer reassurance.

The European Directorate General for Health and Consumer Affairs, DG SANCO, recognises the need for more effective cross-border management of the global product supply chain and has been working alongside the Chinese General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) in order to improve product safety regulation.

The DG SANCO/AQSIQ Memorandum of Understanding, signed in January 2006, established a series of joint initiatives focusing on the improvement of communication channels, increased product testing and enforcement actions against non-compliant manufacturers. This was extended for a further three years in 2008, and a series of tri-lateral summits (also involving the US), meetings and state visits have followed.

In addition, the development of a formal co-operation framework known as Rapex-China, which ensures that AQSIQ is notified of all products considered dangerous by the European market for which China is the country of origin, has become central to the joint regulatory initiative.

However, although China has ramped up its own regulatory framework in recent years, the legal landscape remains patchy, relying on a combination of product-specific articles within the scope of the criminal law and a civil liability regime, enforcement of which – by design – remains dependent on the will of the consumer.

That said, greater public awareness of product safety issues within China, coupled with a growing domestic consumer market, has increased the pressure on Chinese authorities for change. The Tort Law of the People's Republic of China 2009, which came into effect on 1 July 2010, puts manufacturers firmly on the frontline when it comes to consumer defective product claims.

The manufacturer is strictly liable where a defective product causes any harm to a person and, where any defective product causes death or serious damage to health, the victim is entitled to demand punitive compensation.

But traceability is a major challenge – in a significant number of cases AQSIQ has been unable to trace the manufacturer of the alleged defective product. As such, the new tort law in China provides that sellers unable to specify the manufacturer of a defective product will assume liability.

EU Decision 768/2008/EC, which came into force on 1 January 2010, requires that the name and address of both the manufacturer and importer of all goods sold within the EU be indicated on the product itself.

While in theory it may be possible to sue a Chinese supplier in England, it may be very difficult to enforce an English judgment in China. There are no reciprocal arrangements for the enforcement of judgments between the UK and China.

An arrangement has only fairly recently been concluded with Hong Kong, and then only on the basis that the parties have stipulated in advance that either the Chinese or Hong Kong courts will have exclusive jurisdiction over their disputes. China is, however, a party to the New York Convention on the enforcement of arbitration awards, so it is important that any contract includes an arbitration clause. It is also worth investigating the role of any EU-based importer.

Although reform of the regulatory landscape is at last extending to emerging markets, this presents the need to keep abreast of legal developments and to manage supply chain risks before any product safety issue arises is more important than ever, particularly in view of the difficulties associated with seeking redress against an overseas supplier through the courts.

Wendy Hopkins is a partner and Stephen Turner an associate in Beachcroft's London specialist and international risk group.