You are not liable for this in negligence. You are not responsible for the actions of a third party.
However, you could well be liable under the terms of the lease because it was your tenant and you allowed this to happen.
With regard to the tenants dispute over the deposit, if the TDS will not agree to deduct the carpet cost, then you are faced with taking the tenant to court which you can do in the United Kingdom you would then need to enforce any judgement you receive which is not going to be practical in China.
They can claim on the buildings insurance if it covers the carpet but they don’t have to if they don’t want to. They can take you to court and let the court decide the issue if they prefer.
Can I clarify anything for you?
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I said in my first sentence that you were not liable in negligence.
I then said that you would potentially be liable under the terms of the lease.
Being liable under the terms of the lease is one thing, being liable in negligence is another.
It would be very unusual for release not to say that the leaseholder must not cause or allow to be caused, nuisance.
If it doesn’t, then you have no responsibility to the freeholder and it’s up to them to take action against your tenant.