Recovering Money From a Chinese Supplier or Manufacturer

You paid a company in China and the goods never came — or came wrong

You wired a deposit, or the full price, to a supplier in China. The delivery date passed, and the salesperson who used to answer within minutes has stopped replying. Or the container did arrive and what is inside is not what you ordered: wrong specification, wrong model year, used units sold as new, or goods your customs authority will not clear.

A lawyer at home has probably told you there is little they can do, and they are usually right. The company, its bank accounts and whatever it owns are all in China. Recovering the money means acting inside the Chinese system, in Chinese, against a counterparty who is counting on the fact that you cannot.

I am a Chinese-licensed lawyer in Beijing and I work with overseas clients in English. This page sets out what decides whether your money is recoverable — and which cases I decline, because most enquiries on this subject should end with a straight answer rather than a retainer.

First question: does the counterparty exist, and does it own anything?

This decides whether everything after it is worth doing. A judgment against an empty company is a piece of paper you paid for.

A Chinese company is identified by its registered Chinese name and its 18-character Unified Social Credit Code. English trading names, marketplace store names and "factory" names on a business card are not legal identities and cannot be sued. If your contract has neither, establishing who your counterparty is becomes the first piece of work.

Most of what matters is public, free, and in Chinese only:

• National Enterprise Credit Information Publicity System (gsxt.gov.cn) — registration status, credit code, registered and paid-in capital, legal representative, shareholders, registered address, penalties, and whether the licence has been revoked or the company placed on the abnormal operations list.
• Judicial enforcement disclosure (zxgk.court.gov.cn) — whether it is already an enforcement debtor or on the dishonest judgment debtor list.
• Judgments database (wenshu.court.gov.cn) — what it has been sued for before, and by whom.
• Bankruptcy and reorganisation platform — whether insolvency proceedings are already running.

The answers are usually decisive. A company incorporated fourteen months ago, registered capital of RMB 100,000 with nothing paid in, a virtual-office address and several concluded enforcement cases in which no assets were found is not worth pursuing.

Where the operating company is an empty shell there is sometimes still a route to a solvent party: China's revised Company Law tightened the deadline for shareholders to pay in subscribed capital and lets creditors demand unpaid capital be brought forward where the company cannot meet its debts. Whether that applies depends on the shareholding records, which the same search covers.

The mismatch that sinks these cases: the party you signed with is not the party you paid

This is the most common structural problem in the files that reach me. The contract is in the name of a mainland company — a trading company in Shenzhen or Ningbo, say — but the bank details you were sent named someone else: a Hong Kong company with a similar English name, an individual's personal account, or a third-party "payment agent" the salesperson said was needed "for foreign exchange reasons."

It matters because the party you can sue for breach is the party that took on the obligation, while the party holding your money may be a different legal person, possibly outside the mainland. Such a defendant will state in writing that it never received your payment — and on the documents that may be technically true. You can end up with two claims against two defendants: breach of contract against the signing party, and unjust enrichment against whoever received the funds, the second possibly in another forum.

What repairs it is a written instruction from the contracting party designating that account: an email from a company address, a proforma invoice bearing the company's red chop with the beneficiary details printed on it, or a message from the company's own WeChat account telling you where to pay. Find that document now, and export the full chat history rather than cropping screenshots, so sender identity and timestamps survive.

The hardest version is payment to a personal bank, Alipay or WeChat account with nothing linking it to a registered company — there, you may have no defendant at all. Check the chop on your contract too: the binding mark of a Chinese company is a round red seal carrying its registered Chinese name, and one showing only an English trade name is a problem better found now than after filing. Verifying a Chinese company and the due diligence checklist cover the searches in more detail.

Your contract already decided most of this

The dispute resolution clause controls what is possible, so it is read first.

• A valid arbitration clause means you must arbitrate — a Chinese court will decline. Check it names a real, specific institution: clauses saying only "arbitration in China," or naming a body that does not exist under that name, may be invalid, which throws you back into court. See arbitration clause drafting.
• A clause naming a Chinese court generally sends you there. Recent amendments to the Civil Procedure Law also broadened the ability of parties to a foreign-related dispute to agree on a Chinese court in writing.
• Silence generally means suing where the defendant is domiciled, or at the place of contract performance.
• A clause choosing your own home court is usually the worst option. A judgment from a Saudi, Emirati, British or American court is not automatically enforceable in mainland China; recognition depends on a bilateral treaty or on reciprocity, in a separate proceeding with its own cost and uncertainty. Suing at home can be fast, satisfying and worth nothing. Awards travel better: China is a party to the New York Convention, and a mainland court intending to refuse enforcement of a foreign award must report that decision upward through the higher courts first.

Three more things to find now. China is a contracting state to the UN Convention on Contracts for the International Sale of Goods, so where the buyer's country is also a contracting state it can govern automatically unless excluded, changing your notice deadlines and remedies. Note that a number of major buying markets — several Gulf states among them — are not parties, in which case the Convention does not apply at all and the governing law is whatever your contract stipulates, or, failing that, whatever Chinese conflict-of-laws rules point to. Check your own country's status before relying on any Convention deadline. If the contract is bilingual, establish which version governs and have the Chinese read before you rely on the English. And legal costs are generally not recoverable from the losing side unless the contract says they are — if yours is silent, your fees come out of your recovery.

Three situations, three different evidence problems

Deposit paid, nothing shipped

Legally the simplest, factually the hardest once the seller has gone quiet. You need the contract or proforma invoice, your bank's proof of payment showing beneficiary name and account, the agreed delivery date, and evidence nothing was delivered — the absence of a bill of lading is itself evidence. Preserve the messages in which shipment was promised, then postponed, then stopped being mentioned. This becomes a money claim: return of the price, interest, and costs if the contract allows them.

Goods delivered, but not to specification

The operative deadline here is almost never the general limitation period. It is the inspection and claim-notice clause in your own contract, which may give you days from arrival. Read it before you negotiate.

Do not sell, scrap, repair, rework or return the goods before their condition is documented. Evidence that carries weight means inspection by a recognised third party at destination, or a notarised inspection, with the seller invited in writing to attend. Chinese courts often prefer an appraisal by an expert body they appoint, and persuading a court to rely on a report produced abroad is a genuine hurdle — plan the evidence around that. Damages are capped at losses the seller could have foreseen at contracting, so a claim for your own lost downstream sales has to be built rather than asserted. The available remedies are set out in quality disputes with Chinese suppliers and breach of contract remedies.

Used, refurbished or counterfeit goods sold as new

This shades from breach into fraud. If the seller knew, your civil remedies widen and a criminal complaint becomes possible — but be realistic: police frequently classify cross-border commercial cases as civil disputes and decline to open a file, and criminal restitution is slow and rarely complete. It is a pressure point, not a recovery plan.

Vehicles and machinery produce a specific version. The chassis or VIN does not match the contract; the model year is earlier than sold; units are domestic-specification rather than Gulf-specification; "new" vehicles arrive with mileage that is not delivery mileage; or the certificate of conformity and export invoice chain do not support registration at destination — common with parallel-export vehicles where the seller was never the authorised exporter. If your registration or customs authority has refused the goods in writing, that refusal is usually the strongest single document in the case.

If you are buying from China into Saudi Arabia or the UAE

Almost everything written in English on this subject is addressed to European and American importers. Gulf buyers face the same problems with far less material written for them, plus a few of their own. The shape is familiar: a buyer in Riyadh, Jeddah, Dubai or Sharjah; vehicles, auto parts, machinery, generators, building materials or electronics; a seller met at the Canton Fair or through Alibaba, 1688 or WeChat; a thirty per cent deposit or full payment by telegraphic transfer; and a contract that is either English-only or a one-page proforma invoice.

• Arabic-language documents. Your commercial registration, company extract and power of attorney need certified Chinese translation to be filed. I arrange that; the working language between us is English.
• Notarisation and authentication. China joined the Hague Apostille Convention with effect from 7 November 2023, so for public documents from another contracting state an apostille replaces consular legalisation; documents from a non-party state still take the slower embassy route. Which applies to your country changes the timeline by weeks (see using apostilled documents in China).
• Ordinary commercial evidence is easier to file than you may expect. Invoices, wire confirmations, emails, chat records and inspection reports created abroad are generally not subject to the notarisation and authentication requirement; that bites mainly on documents proving corporate existence and signing authority.
• The power of attorney is the practical bottleneck. As a foreign claimant you either sign it in front of the judge in China, or sign it abroad and have it notarised and then apostilled or legalised. Start early — it delays more cases than any other document.
• Conformity certification. If your goods were stopped at your border for want of the certification your market requires, and the contract obliged the seller to supply certified goods, that decision is evidence of breach.

Beijing runs four to five hours ahead of the Gulf, so same-day contact within your working hours is straightforward.

The deadlines that actually bind you

The general limitation period for a contract claim in China is three years, running not from the date of the contract but from the point at which you knew, or should have known, that your right had been infringed and who owed you.

It can be restarted: a demand on the debtor, an acknowledgment or promise to pay, or the commencement of proceedings all interrupt the period and start the three years again. The form of the demand matters — a courier-delivered letter with proof of receipt is far stronger evidence of interruption than a WeChat message that was never answered. Send both and keep the courier record.

Several shorter deadlines will reach you first:

• Your contract's inspection and claim-notice period for non-conforming goods, sometimes measured in days from arrival.
• Notice of non-conformity under the CISG, where it applies: within a reasonable time, and in any event within two years of the goods actually being handed over.
• Platform dispute windows. If the order was placed and paid through a marketplace's own protection scheme, that process is free and much faster than litigation, but the window is short and runs from the delivery deadline. Check it today.
• Recalling a wire transfer. Realistic only in the first days, and only with the receiving bank's and the beneficiary's cooperation. Ask your own bank immediately; do not wait for a lawyer to tell you to.
• Enforcement. Once you hold a judgment or award, the application to enforce it must be made within two years of the performance deadline it sets.

Why asset preservation, not the demand letter, usually decides the outcome

The intuitive sequence — send a firm letter, threaten proceedings, sue if nothing happens — is often exactly the wrong one. A Chinese company's bank balance can be moved in a day, and between your first letter and a judgment lie months or more than a year. A defendant who has been warned uses that time; one whose operating account is frozen before it knew the case was coming has an immediate cash-flow problem and a reason to negotiate.

Chinese civil procedure allows a court to preserve assets before judgment, freezing bank accounts, real property, vehicles, equity interests and payment-platform balances. Pre-litigation preservation is applied for before the claim is filed: the court must rule quickly, in urgent cases within 48 hours, and if it grants the application it executes immediately — but you must then commence your suit or arbitration within 30 days or the freeze is lifted. In-litigation preservation is applied for with or after the complaint. Security is required: a cash deposit or guarantee, though in practice a litigation preservation liability insurance policy is what makes this affordable for a foreign claimant, since the premium is a fraction of the sum frozen rather than the sum itself.

In money-recovery cases against suppliers, a successful freeze is usually the event that produces payment; the judgment matters, but the leverage arrives earlier. The implication is uncomfortable but worth stating: if you want the strongest position, bring the case before you announce it.

If you are heading to arbitration, a tribunal cannot itself freeze mainland assets. At CIETAC or another mainland institution, the institution forwards your preservation application to the competent court. For Hong Kong-seated arbitration before an eligible institution, a 2019 arrangement between the mainland and Hong Kong lets you apply directly to a mainland court for interim measures. Choose Singapore, Paris or Dubai as your seat and there is generally no route to a mainland freeze until you hold an award.

What the process looks like, and what it costs

1. Verification and viability review — days, not weeks. Entity and credit code, enforcement and litigation history, apparent assets, the contract read in both languages, the payment trail. The output is a decision: whether there is a claim, against whom, in which forum, and whether it is worth bringing.
2. Document assembly — two to six weeks, paced by your side. Power of attorney and corporate documents notarised and apostilled or legalised; certified Chinese translation of the contract, invoices, payment records and correspondence.
3. Preservation application and filing, sequenced deliberately.
4. Acceptance, service, evidence exchange and hearings, then judgment and any appeal, then enforcement.

On timing, the statutory trial time limits producing the "six months for first instance" figure you will read elsewhere do not apply in the same way to foreign-related cases. Plan on six to eighteen months to a first-instance judgment, longer with an appeal, and enforcement on top. Where the defendant has assets, money in hand one to three years after filing is realistic; a meaningful share of cases end earlier, by settlement after a freeze.

The cost has more components than the legal fee:

• Court acceptance fee — a sliding percentage of the amount claimed, paid on filing, normally allocated to the losing party in the judgment, with half refunded if the case is withdrawn or settles.
• Preservation application fee — scales with the sum preserved, but capped — plus the security itself, or the insurance premium standing in for it.
• Notarisation, apostille or consular legalisation, and courier.
• Certified translation, priced by volume — the most common surprise, driven by how much correspondence you want in evidence.
• Appraisal or inspection fees where the condition of the goods is contested.

These do not shrink when the claim is small. That arithmetic, not any reluctance, is why small claims against Chinese suppliers usually should not be litigated.

How I charge, including contingency

• Fixed fee for the verification and viability review, and for a formal demand letter on firm letterhead. Most matters start here, and some should end here.
• Hourly or staged fixed fees for litigation and arbitration.
• Risk agency, or contingency, for straightforward money-recovery claims: a reduced or nil fee at the outset in exchange for a share of what is actually recovered. Chinese regulation permits this for monetary claims but caps the share, and the cap applying to a Beijing firm is set by local pricing standards. The exact permitted percentage goes in the engagement letter before you sign anything. Contingency is prohibited by regulation for certain categories of case, so it is not available for every dispute.

What contingency does not cover, and no arrangement can: court fees, preservation security or its insurance premium, notarisation and authentication, translation, appraisal and travel. Those are yours whatever the fee structure. Anyone telling you a Chinese case costs you nothing until you win is not describing the disbursements.

I will not take a contingency case I do not believe is collectible, which is the point of putting a cheap verification step first.

Cases I turn down

Being specific about this is more useful to you than a list of practice areas.

• Consumer-scale purchases. One phone, one appliance, one clothing order — a few hundred or a few thousand dollars from a marketplace seller. Court fees, translation and authentication would exceed the recovery. Use the platform's dispute process, ask your card issuer about a chargeback, or use China's free government complaint channel, which for these amounts is the right answer: see the guide to the 12315 platform.
• Counterparties that do not legally exist. A WeChat contact, an unregistered trade name, funds sent to a personal account, and no document connecting either to a registered company. There is no defendant to name.
• Companies already stripped. Deregistered, revoked, or carrying a run of concluded enforcement cases in which no assets were found — unless there is a solvent shareholder or unpaid registered capital worth pursuing. You get that answer after the search, not after the retainer.
• Payments made in cryptocurrency to wallets that cannot be tied to an identifiable person or company.
• Requests for a guaranteed outcome, or a prediction of the result before the file has been read.
• Non-legal sourcing work — finding suppliers, negotiating prices, factory audits, pre-shipment inspection. Inspection companies do this better and for less.

Stated positively: the cases worth bringing have an identified mainland entity, a documented payment trail to it, assets or shareholders worth freezing, and enough at stake to carry fixed costs that do not scale down.

If you want your case assessed

Send what you have, in English, by email. In rough order of importance: the contract or proforma invoice, every page, including any Chinese text and any red chop; your bank's payment confirmation showing the beneficiary name and account number; the bill of lading, packing list and customs documents if goods shipped; inspection reports, photographs, and any written refusal from a customs or registration authority; the full email and chat history with the seller, exported rather than screenshotted where your app allows it; and the amount you are claiming.

If you do not know the seller's registered Chinese name or credit code, send whatever identifiers exist: the marketplace store link, the characters on the chop, the beneficiary name from your wire, a photograph of a business card.

What comes back is an assessment: whether the counterparty exists and what the public record says about its solvency, which forum your contract commits you to, what the realistic claim is and against whom, what it would cost, and whether it is worth doing. Where it is not, I will say so directly — that is the more common answer.