Importing from China — or opening commercial operations there — inevitably raises one question: do I have to pay my supplier everything upfront? The short answer is that advance payments are a standard, legitimate practice in international trade with China; the key is knowing what payment structure is normal, how to verify your counterpart, and which method to choose to protect your money.
At Lafa Legal, we advise Latin American companies on their legal and commercial operations in China, and this is — by far — the question we hear most often before a deal is closed. That is why we have prepared this guide: so that you know exactly what to expect, what to negotiate, and how to pay with complete peace of mind.
Is it normal for a Chinese supplier to ask for full payment in advance?
It pays to be precise, because there is a great deal of misinformation around this topic. In international trade with China, paying 100% upfront is not the norm; what is standard is a staggered structure:
Deposit (20–50%, usually 30%): covers the purchase of materials and the start of production. This is completely normal, and the vast majority of legitimate factories request it.
Balance against shipping documents (the remaining 70%): paid once production is finished, once it has been verified that the goods exist and are ready to ship (quality inspection, Bill of Lading).
Optional final retention: some agreements include a small percentage held back until the goods are received and verified at destination.
If a supplier insists on collecting the full amount before manufacturing, that does not automatically mean fraud — but it should prompt you to step up your due diligence: verify the company’s business license in China, confirm that the bank account is in the exact legal name of the contracted company, and request an audit or inspection before paying the balance. A serious factory will never refuse these steps.
The signs of a professional supplier — or advisor
Not all advance-payment operations are equal. These are the signs that separate professional counterparts from improvised ones:
At Lafa Legal, for example, we always work with a bilingual contract and a registry verification of the Chinese counterpart before our clients transfer a single yuan, because we understand that trust in China is built with clear processes and documents — not with promises on WeChat.
How to pay China safely: the methods that protect you
How you pay matters as much as whom you pay. These are the most widely used methods in trade with China, ordered from highest to lowest protection:
What to avoid: the mistakes that do expose you to risk
No alarmism, but full awareness: these practices are red flags in any operation with China:
The golden rule: registry verification in China is accessible and takes days, not months. Confirming the business license, the legal representative, and the company’s status in the national corporate registry before paying is your best insurance.
Frequently asked questions about advance payments in China
Is it normal for a Chinese supplier to ask for 100% upfront? It is not the norm. The industry standard is a 30% deposit and 70% against shipment. If they ask for the full amount, negotiate milestones or demand additional guarantees.
What does T/T 30/70 mean? It is the most common structure: 30% by wire transfer when the order is confirmed, and 70% when production is completed, usually against a copy of the Bill of Lading or after a quality inspection.
How do I get my money back if I pay in advance and the supplier doesn’t deliver? It depends on the method: with Trade Assurance or escrow you can open a dispute; with a letter of credit, the bank protects the operation; with a direct T/T transfer, the legal route applies — which is why the bilingual contract and the PI are your best evidence, and prior verification your best prevention.
Is it safe to pay a Chinese supplier via WeChat or Alipay? For samples and small amounts with an established relationship, it can be acceptable. For significant commercial operations, prioritize T/T to a corporate account, a letter of credit, or Trade Assurance.
Conclusion: trust in China is built with processes, not risks
Paying a Chinese supplier in advance does not have to be a leap into the void. With a bilingual contract, prior registry verification, milestone-based payments, and the right method for your transaction volume, the deposit is simply the standard way to start a successful business relationship.
At Lafa Legal, we have designed our service precisely for companies that value peace of mind when operating in China: legal verification of counterparts, bilingual contracts reviewed by local lawyers, support in negotiating payment terms, and end-to-end follow-up of the operation. Because the best business with China starts when both parties know exactly where they stand.
Are you about to close an agreement with a supplier or partner in China? Schedule an initial consultation with us and learn how we protect every stage of your operation.
— Lafa Legal | Legal and commercial advisory in China for Latin American companies