I’ve often had legal clients come to me for translation work, only to realize after an initial consultation that what they really required was not a translation at all, but a localization. Localization projects do involve translation, but they are a much more complicated (and costly!) process, and the end product of a localization project is vastly different from just a standard translation.
Legal clients get confused between the two because the very specific technical meaning of what “translation” actually means is poorly-understood outside of the translation industry. When a document is to be deployed or executed in a foreign jurisdiction, such as when you have a contract in English that you want to be signed and enforced in China, a localization into Chinese is needed instead of a translation. And while localization can cost significantly more than a standard translation, many of my business (but not legal) clients who sell products internationally do understand what a localization is, and are willing to pay this additional cost because they know, from an ROI perspective, that a localization is worth it.
Contracts that have only been translated, but not localized, might be in perfect grammatical English but filled with Un-Chinese language, known as “translationese” within the industry. A PRC judge would struggle to understand such a contract when it is put before them, due to the differences in terminology and writing style between this translated contract and a contract natively written in Chinese. In the worst-case scenario, this can lead to “translation disasters”, costly legal disputes and losses for your company. Localization can also involve restructuring or amending parts of the original contract to better fit what your business wants to achieve in China. Essentially, a translation of your original English contract is used as a basis for creating a new contract in Chinese with the same purpose as your English contract.
The Three-Step Localization Process
Localizations are costlier and more time-consuming than translations, but they are essential for protecting your interests when doing business in China. From my experience, this is a three-step process I would recommend for any business that needs a contract localized into Chinese:
1. Translate the original contract into English for use as a scaffold
The first step of a localization project is usually translation, but no standard translation of an English legal contract into Chinese should ever be used as an executable document. Rather, this translation should be used as a basis for later stages of the localization work. Request that the translation firm or agency you’re working with assigns a translator with a PRC law qualification to the project. This is an important but also relatively common qualification that most graduates of legal translation schools in China would hold.
Precise accuracy is not really required here, but a law qualification would at least ensure that the correct PRC legal terms are used. While it would be best for the translator to also possess a translator certification, such as from organizations like the CIOL (Chartered Institute of Linguists) or ATA (American Translators Association), it is not strictly required at this stage.
2. Request that a local law firm adapts the document and localize the language
The translated document should be sent to a local law firm so that the language and terminology used can be checked over and corrected by their attorneys. Not only would these attorneys audit the earlier translation work completed and ensure that all legal terminology is correct, but they would also play the more important role of changing the contract so that it properly protects your interests in China. This requires legal expertise in PRC contracts and extensive legal research, which an attorney and not a translator would be best suited for.
This part of the process can also be costly. The law firm would need to comprehensively gather and organize all facts relevant to the contract, and understand your goals in China as well as your goals in other international markets. A Shanghai law firm I know would consult multiple Chinese experts in the industry to understand the law applicable to your transaction, and reference other contracts typical in the industry to understand how the Chinese contract should be written and structured to serve the same intended purpose as the original English contract.
A good law firm might also make additional recommendations on how your contract should be restructured, or conduct basic due diligence on the Chinese counterparty to ensure that you are dealing with a legitimate Chinese business that actually exists and has the ability to uphold their end of the transaction. Foreign businesses run the risk of being scammed by fake Chinese companies when doing business in China due to a lack of basic due diligence and an over-reliance on bad translations – the Luckin Coffee scandal is one high-profile example. (we wrote about this scandal here)
If the law firm carries out this localization properly, the final result should be a contract indistinguishable from a local Chinese contract, even to a PRC judge. You should also request that they explain their rationale behind the contract in a written Chinese memo.
3. Obtain a certified translation of this localized Chinese contract back into English
This final step is important to ensure that your localized contract is in line with your company’s overall strategy, and does not run afoul of any US/UK international laws, or the laws of your home country. PRC lawyers can sometimes have you violate US/UK international laws to comply with Chinese ones, which a certified translation of the contract would help you catch. It would also catch any provisions in the contract which would have you agreeing to actions that are unacceptable to your home country’s culture.
Do not skip this step and just assume that your original English contract is a good enough source for understanding exactly what is written down in your localized Chinese contract. Because precision and accuracy are required here, unlike the initial translation this translation back into English should be undertaken by a certified translator, preferably with at least a legal background equivalent to an federal linguist, or a paralegal. It should also be made very clear to the translator that they are to provide a certified translation under seal, not a localization.
Oversee the Process
The US/UK lawyer providing general legal counsel to your company is best suited to oversee this entire localization process. They should have oversight over the legal firm in China, and ensure that the company’s general strategy and the general principles of the law are being followed. One of their most important tasks is also to make sure that qualified experts are assigned to work on each part of the localization process, from the translators to the attorneys and industry experts.
Certification is Important
Despite the risks in trusting work produced by an uncertified or unqualified translator, many people still overlook this critical aspect. Unless you specifically ask for a CIOL or ATA certified translator from a translator agency, they would often go straight to the bottom of the bargain bin and assign your work to the freelancers with the lowest rates, likely a housewife working part-time to supplement their income (Some 95% of freelance translators working the Chinese-English language pair are of this demographic, compared to less than 50% for most European language pairs).
You wouldn’t want an unlicensed lawyer representing your company, or trust an unlicensed doctor to provide medical care – the same should be true for translations. In my experience, translations from law firms, government bodies, or even uncertified translators from translation firms are only capable of producing work minimally different from Google Translate output, with many machine translation errors going uncorrected. The danger here is that, to the average translation client, these translations would actually look to be of quite high quality! This is because Google Translate usually very accurately predicts what an untrained translator would write, which looks good to the untrained eye. When clients see work produced by an untrained translator, it fits their idea of what the translation should be, despite being rife with errors.
The professional certified translator would have enough knowledge to avoid these mistranslations, and for that they are paid rates similar to other types of professionals – engineers, lawyers, and auditors. They would also have the education and training to match. While the typical Chinese to English freelance translator under an agency might make anywhere from $7 to $15 an hour, certified translators make upwards of $60 an hour. These extra costs, however, are a necessary expense if you want a translation that you can rely on to make business decisions.
Takeaway
Localization and translation are two very different processes that should not be confused. If your company needs a contract that can be enforced in China, a localization is what’s required, instead of a straight translation. It’s also important for your company’s own lawyers to oversee this localization process, and ensure that the work is carried out by qualified translators and local attorneys.
