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Supplier refuses to ship out goods after payment

by Mike Bellamy in 'China Sourcing Information Center'

We placed an order to a supplier and paid him a deposit and the balance. After getting the balance payment the supplier refused to ship out the goods. Now he offers to return only 50% of the PI amount. How can we get him to return the total PI amount back?


The following blog post offers some suggestions on how to handle a situation like yours:

“They took the money and ran!”

The first question to ask yourself is “do you want to save the relationship with this company so that you can do business in the future?” If the answer is “yes”, then you should consider getting a 3rd party mediation firm involved. is a mediation firm that I have used and can recommend. They also have Russian clients.

If your answer to the above question is “no”, then I suggest you work with a Chinese lawyer to issue a demand letter and if that doesn’t work- go to court. Here are two blog posts that explain in detail about demand letters and going to court in China:

Resolving a dispute: Demand letters and legal options

Can foreigners win in a Chinese court?

I have used the English speaking Chinese law firm of for your reference.

Let me know if you would like an introduction to Chibridge or SouthernPerspectiveSZ and I will be happy to put you in touch.

In hopes that this problem doesn’t happen next time, I would like to offer a few videos that give tips and strategies about selecting good suppliers and organizing payments:

Finding Suppliers

Evaluating Suppliers

Negotiations, Purchase Orders and Contracts: Lessons from 12 Years- Sourcing in China

You may also be interested in the following blog posts that relate to your problem:

Why your Chinese supplier(s) break the terms of your Purchase Order (PO)


Wishing you successful China sourcing!

Question answered by Mike Bellamy, an Advisory Board Member & Featured Blogger at the not-for-profit China Sourcing Information Center. Mike is also the author of "The Essential Reference Guide to China Sourcing" and founder of PassageMaker Sourcing Solutions.

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