The agreement signed last week during Chinese Premier Li Keqiang's visit to Canada is focused on the "returning" and "sharing" money generated through criminal activity.
Under the deal, if the courts in either country determine the legal ownership of the money transferred overseas, the assets, once recovered, have to be immediately returned to its legitimate owners.
However, if the courts can't make a determination of who owns the money, the two sides will then enter into negotiations to determine how much either side will be entitled to.
Xu Hong, head of the department of treaties and laws with the Chinese Foreign Ministry, says the new agreement should help both sides recover funds which go beyond the theft of the original money.
"The sharing system serves as an additional method for the recovery of the assets transferred overseas. Through the sharing system, any money generated through the proceeds of crimes can also be partly recovered. Beyond this, the new agreement should also help encourage more equal legal and law enforcement cooperation between different countries."
The deal signed between China and Canada last week is the first specific agreement China has signed with other countries on recovering income generated through funds stolen from China that are transferred overseas.
China now has 79 bilateral legal assistance agreements with 60 different countries, as well as extradition treaties with 46 countries.
Foreign Ministry spokesperson Geng Shuang says they plan to continue negotiating to increase those numbers.
"China will further improve its legal and law enforcement cooperation with other countries. We also plan to sign more special agreements on recovering crime-related assets with foreign countries and reinforce its efforts with this respect and extradition of suspects at large after gathering more experience and when the condition permits."
The new deal with Canada is an extension of the "Fox Hunt" campaign the Chinese government launched in 2013 to repatriate Chinese officials who have fled overseas with state money.
This year's campaign has already seen over 400 suspects returned to China.
For CRI, I'm Xie Cheng.
