Legal basis: Civil Code of People's Republic of China (PRC).
Article 693 Where the creditor of a general surety fails to bring a lawsuit against the debtor or apply for arbitration during the suretyship period, the surety is no longer liable for suretyship. If the creditor of joint and several liability guarantee fails to ask the guarantor to bear the guarantee responsibility during the guarantee period, the guarantor will no longer bear the guarantee responsibility.
Article 694 Where the creditor of a general guarantee brings a lawsuit or applies for arbitration against the debtor before the expiration of the guarantee period, it shall be counted from the date when the limitation period of action for the guaranteed debt expires and the right of the self-insured witness to refuse to bear the guarantee responsibility disappears.
Where the creditor of joint and several liability guarantee requests the guarantor to assume the guarantee responsibility before the expiration of the guarantee period, the limitation of action for the guaranteed debt shall be calculated from the date when the creditor requests the guarantor to assume the guarantee responsibility.