How to Recover Unpaid Invoices from a Chinese Supplier (Step-by-Step Guide)

Many overseas companies only contact a lawyer after a Chinese supplier stops responding.

By then, it may already be too late.

If you are dealing with unpaid invoices, delayed shipment, or a supplier refusing refund, here is what you need to know.

Step 1: Check Whether Your Contract Is Enforceable in China

The first question is not “Can I sue?”It is:

Is your contract enforceable in a Chinese court?

Key issues:

• Is there a jurisdiction clause?

• Does it specify Chinese court or arbitration?

• Is the Chinese company’s legal name correct?

• Is there an official company stamp?

Many English-language contracts are not directly enforceable in China.

If your contract lacks a China jurisdiction clause, you may need to re-evaluate strategy immediately.

Step 2: Identify Assets Before Filing a Lawsuit

Winning a lawsuit means nothing if there are no assets.

Before filing, you should:

• Conduct a company background check

• Identify bank accounts

• Verify registered capital

• Check litigation history

A proper due diligence investigation often determines whether litigation is worth pursuing.

Step 3: Consider Pre-Litigation Asset Preservation

One powerful tool under Chinese law is asset preservation before filing a lawsuit.

This allows you to:

• Freeze bank accounts

• Freeze real estate

• Freeze receivables

In many cases, freezing assets forces the supplier to negotiate quickly.

Step 4: File in the Correct Chinese Court

Jurisdiction matters.

The competent court is usually:

• The defendant’s registered location

• Or the place of contract performance

Filing in the wrong court wastes time and money.

Step 5: Enforce the Judgment

After judgment, enforcement is critical.

Chinese courts can:

• Freeze additional assets

• Restrict high-level consumption

• Add the debtor to a blacklist

However, timing is everything. Delays reduce recovery chances.

Final Advice

If you suspect payment risk:

Act early.

The earlier legal strategy begins, the higher the recovery rate.

If your company is facing unpaid invoices in China, a structured legal approach is essential.