Paying a Chinese supplier safely
More money is lost paying the wrong account than to bad quality, late delivery and every other sourcing problem combined. Almost all of it is preventable by two checks and one contract clause.
In short: the receiving bank account must be in the supplier’s registered company name, exactly as it appears on their business licence. Never pay a personal account or an unrelated third party. Fix the account in the contract at the outset, state in writing that it will never change by email, and verify any change by voice on a number you already held.
The one check that matters most
Before the first payment, take the account holder name your supplier has given you and compare it — character by character — with the registered company name on their business licence and on the national registry. Those three things must be the same entity.
That is the whole check. It takes ten minutes, it costs nothing, and it catches the overwhelming majority of losses in this trade. It works because a Chinese company’s corporate bank account is opened in its registered name and the name cannot casually differ.
If the account holder name does not match the company you contracted with, stop and get it explained before any money moves. There are legitimate explanations. There are also the other kind, and you cannot tell them apart by how confident the answer sounds.
Deposit structures
Chinese manufacturers generally expect a deposit. That is normal and it is not a warning sign — tooling, materials and production slots cost them money before you pay anything. What matters is what the balance is tied to.
| Structure | Reasonable? | Comment |
|---|---|---|
| 30% deposit / 70% against bill of lading copy | Yes | The common default. Your balance is tied to evidence the goods shipped. |
| 30% deposit / 70% after passed inspection | Better | Ties the balance to quality rather than to despatch. Negotiable on repeat orders. |
| 50% deposit for custom tooling | Often reasonable | Fair where they are cutting a mould for you. Agree who owns the tooling, in writing. |
| 100% before production | No | You have no leverage left. Occasionally unavoidable for tiny orders; price the risk accordingly. |
| Deposit increased after the contract is signed | Investigate | Sometimes cash-flow trouble at the factory. That is information you want. |
Hong Kong and third-party accounts
A great many mainland manufacturers invoice through a Hong Kong company, and there is nothing inherently wrong with it. Hong Kong sits outside mainland foreign-exchange controls, which makes receiving foreign currency simpler.
It stops being routine and becomes a problem in three situations:
- The Hong Kong company is not the entity on your contract, and nobody will explain the relationship.
- The arrangement appears only after the contract is signed, rather than being disclosed up front.
- The account is in an individual’s name rather than a company’s.
The fix is simple: whichever entity is going to receive the money should be the entity that signs the contract, or the relationship between them should be stated in the contract. If your supplier will not put that in writing, you have learned something useful for a very small price.
Never accept a third-party payer arrangement in the other direction either. If a supplier asks you to pay someone else’s invoice, or to split payment across unrelated accounts, decline. That pattern is associated with money-laundering typologies, and being part of one is not a defence.
The bank-detail change attack
This is the single most expensive fraud in cross-border trade and it does not require anyone to hack you. The attacker gets into your supplier’s email — usually a reused password on a free mailbox — and then waits. They read the thread. They learn the product, the amount, the tone and the timing. Then, at the moment the invoice falls due, a message arrives from the real account, or from a lookalike domain differing by one character, explaining that the usual account is frozen for a tax audit or that the company has changed banks.
The English is good, because they are copying earlier messages. The request fits the conversation, because they have been reading the conversation. And it is urgent, because isolation is the objective.
| Signal | What it means |
|---|---|
| Account name differs from the registered company name | Almost always fraud. Strongest single indicator. |
| Change announced by email, close to the due date | The timing is the tell. |
| A reason you should not call — audit, holiday, staff change | Deliberate isolation. |
| Sender domain differs by one character | Check the full header, not the display name. |
| New account in a different country to the supplier | Needs explaining before, not after. |
The verification rule is absolute: never verify a change using any contact detail contained in the message announcing it. Call a number you held before the change, and speak to a person you have spoken to before.
Payment methods compared
| Method | Recourse if it goes wrong | Notes |
|---|---|---|
| Telegraphic transfer (T/T) | Very little once settled | The default. Speed is the point and also the problem — recovery depends on hours. |
| Letter of credit | Bank-mediated, document-driven | Real protection for large orders, but pays against documents, not against quality. Costly and slow for small buyers. |
| Platform escrow / trade assurance | Within platform rules and windows | Genuinely useful — but ends the moment the relationship moves off-platform, which is exactly when people stop noticing. |
| Credit card via a platform | Chargeback may be possible | Usually only for small values, and fees are higher. |
| Cryptocurrency | None | No legitimate reason for a manufacturer to require it. Treat the request as disqualifying. |
What to put in the contract
- Name the receiving account — bank, account name and number — in the contract itself, not only on the invoice.
- State that the account will not be changed by email, and that any change must be confirmed by video or telephone call on previously exchanged contact details.
- Tie the balance to a verifiable event — a passed inspection, or a bill of lading copy — rather than to a date.
- Agree tooling ownership explicitly where you have paid for it.
- State what happens to the deposit if the goods fail inspection, if delivery slips beyond an agreed date, or if an export licence is refused.
- Name the legal entity precisely — registered Chinese name and Unified Social Credit Code, not just the English trading name.
None of that requires an expensive contract. Six sentences added to the supplier’s own pro-forma covers most of it, and a supplier who objects to any of the six is telling you something worth knowing now.
If it has already gone wrong
Recovery is measured in hours, not days. In order:
- Call your bank immediately and ask them to attempt a recall. Do this before anything else, including before contacting the supplier.
- Report it to the relevant fraud reporting body in your country. Speed matters for the same reason.
- Contact the real supplier by phone, not email — their mailbox may still be compromised, and your messages may be being read.
- Preserve everything: full email headers, the invoice, the account details, the timeline.
- Change the supplier’s access assumptions — treat every message in that thread as potentially seen by a third party.
We apply the same rule to ourselves. Our own bank details never change by email, and if you receive a message that appears to come from us asking you to pay a different account, it did not come from us. You can verify our registration on the national registry — here is how.
Want the account checked before you send anything?
We verify the receiving account name against the supplier’s registered entity on the national registry, and tell you within a working day.
Sources
- National Enterprise Credit Information Publicity System (国家企业信用信息公示系统)
- State Administration of Foreign Exchange (国家外汇管理局)
This guide is general information, not legal advice. Requirements vary by city, document and personal circumstances — confirm your specific case before acting. Last checked 23 August 2026.
