Chinese Supplier Not Refunding Your Deposit? Your Options

If a Chinese supplier has kept your deposit or advance payment, the next step is to establish who owes the money, what the documents show and whether recovery is commercially worthwhile. Repeated promises to pay can be useful evidence, but they do not replace a clear recovery plan.

Eugen Law Firm assists UK and overseas businesses with Chinese supplier disputes, from reviewing the claim and issuing a Chinese lawyer's demand letter to litigation, arbitration and enforcement. We offer a free brief preliminary assessment based on your key documents, with an initial view on the available options, recovery prospects and proportionate next steps. You can then decide whether to proceed with a clear understanding of the proposed scope and fees.

Can you recover a deposit from a Chinese supplier?

Potentially, yes. The answer depends on the agreed terms, what happened to the order and any later agreement to cancel or refund. A missed shipment, a quality complaint and a mutually agreed cancellation can raise different questions. The supplier may also dispute the amount or claim a right to deduct manufacturing costs.

Where Chinese law applies, the Civil Code provides remedies for contractual non-performance and addresses the consequences of termination. It does not make every payment automatically refundable when a buyer wants to cancel. Calling a payment a “deposit” in English also does not, by itself, establish that China's special rules on earnest-money deposits apply. PRC Civil Code, Articles 566, 577 and 586–588.

Our initial task is to identify the contractual basis for recovery and the evidence needed to support it.

First, check the company behind the invoice

An English trading name, a functioning website and a responsive salesperson are useful leads. A recovery claim requires a closer match between the contracting party, the recipient of your payment and the company being pursued.

We can check the supplier's Chinese registered name and Unified Social Credit Code against the documents, then review its recorded status and available public information. Where the invoice, company stamp and bank beneficiary use different names, we examine the relationship rather than assume they identify the same entity.

A company recorded as active may still have limited funds or existing debts. Registered capital is not a bank balance, and public searches cannot establish every asset or liability. The purpose of this work is to inform the decision about further spending and identify questions that need deeper investigation.

Our Chinese company verification service explains the different levels of checking available.

What documents should you send a Chinese lawyer?

A focused initial bundle helps us assess your position and recommend a practical next step. Start with:

• The contract, purchase order or pro forma invoice, including terms on the reverse or in separate attachments.
• Bank payment confirmations showing the payer, beneficiary, date, amount and currency, plus any refunds received.
• The most relevant messages about delivery, cancellation and repayment.
• Any refund agreement, settlement document or release, including the complete version you signed or returned.
• A short chronology and your calculation of the amount still outstanding.

Please also identify the business or individual that placed the order. A director arranging a purchase and a company entering the contract are not necessarily the same claimant.

You do not need to translate every conversation before making an enquiry. Keep the original Chinese and English documents, preserve complete message histories and retain access to the relevant accounts and devices. China's civil evidence rules recognise instant messages and other electronic communications as electronic data; their source, authenticity and context still matter. Supreme People's Court provisions on civil evidence, Articles 14–15 and 93.

Selected screenshots can help us identify the issues. A detailed review may require the surrounding conversation and attachments, particularly where a refund was made conditional on another document.

How we approach supplier refund recovery

1. Assess the claim and agree the scope

We review the relevant terms, payment trail and correspondence within the agreed engagement. We consider the supplier's response, the identity of the parties, the dispute resolution clause and available information about recovery prospects.

The result should support a practical decision: pursue a negotiated payment, prepare formal proceedings, obtain further information or reconsider whether further expenditure is justified. We also identify any timing concerns that require attention before prolonged negotiations.

2. Send a formal demand and conduct negotiations

Where appropriate, we issue a demand in Chinese identifying the claim, the amount sought and the required response. We then handle settlement correspondence within the agreed scope and report the supplier's position to you in English.

A lawyer's letter can help move discussions beyond repeated exchanges with a sales contact. It cannot compel payment or freeze an account. If the supplier offers instalments or a reduced settlement, we can review the proposed terms, including when any release takes effect and what happens if payment is missed.

3. Consider proceedings and preservation separately

If negotiation does not resolve the matter, we assess the appropriate court or arbitration route under the agreement and applicable rules. Proceedings require a separate scope and quotation.

Where justified, we can also advise on applying for asset preservation. This requires the relevant legal conditions to be met and may involve security and additional costs. The sequence matters: urgent circumstances may call for considering protective measures before sending another demand.

4. Pursue enforcement where required

A favourable judgment or award does not itself put money into your account. If the debtor does not pay voluntarily, enforcement may be needed against available assets. We discuss that prospect as part of the commercial assessment, rather than treating success in proceedings as the end of the matter.

See our China commercial litigation and debt recovery service for the wider scope of representation.

What will it cost, and can you manage it from overseas?

We quote by reference to the documents, complexity, amount in dispute and work required. Following the preliminary assessment, we explain the proposed work and fees so you can judge whether the next stage makes commercial sense. Where suitable, we can agree a fixed fee covering a defined document review, formal demand and negotiations.

Litigation, arbitration, preservation and enforcement are scoped separately. Court or tribunal fees, translation, document formalities and preservation security may create additional costs. We explain the relevant categories before recommending that you proceed.

Overseas clients can communicate with us in English by email and video call. We coordinate the Chinese legal work and explain the documents and authority needed for representation. If proceedings are required, corporate records, powers of attorney and supporting materials may need translation or formalities appropriate to the document, country and receiving body.

For qualifying public documents, the Apostille Convention can replace consular legalisation where it operates between the relevant countries and mainland China. It does not mean that every document needs an apostille, or that obtaining one resolves all filing requirements. China Ministry of Foreign Affairs guidance.

Common questions

The supplier promised a refund on WeChat. Is that enough?

It may be useful evidence. We also need to consider who sent the message, whether conditions were attached, the amount acknowledged and any later agreement. Preserve the full conversation and the original account access.

The company is active. Does that mean recovery is likely?

Active registration is a useful starting point. We also consider the strength of the claim, the supplier's financial position and accessible assets when assessing the practical prospects of recovery.

Do I have to sue immediately?

Not necessarily. A demand and negotiated settlement may be proportionate, but deadlines or asset concerns can affect the order of steps. We assess those issues before recommending a route.

How do you assess whether a claim is worth pursuing?

We consider the amount outstanding, the evidence, available information about the debtor and the likely cost of each route. Our aim is to help you choose a proportionate next step, whether that is a demand, negotiation, further investigation or proceedings.

Ask us about an unpaid supplier refund

Email [email protected] or use our contact form. Include the supplier's name, the amount and currency outstanding, a brief timeline, and the contract and payment records if available. Please highlight any proposed settlement deadline or urgent concern.

We will provide a free brief preliminary assessment of the key materials and an initial view on your options and next steps, together with the proposed scope and fees. If you decide to instruct us, we will complete our client checks and engagement arrangements before beginning the detailed review and recovery work.

General information as at 9 September 2026. The appropriate course depends on the documents and circumstances of the particular dispute.