A Chinese lawyer’s account of contract fraud targeting foreign buyers of Chinese goods—and why I built this site to help overseas clients verify suppliers and recover losses.
Over the past year, I have received numerous legal consultations regarding contract fraud committed by suppliers based in China. The inquirers came from a range of countries, including Poland, Morocco, and Guatemala.
The problems these inquirers encountered share certain common features: in the course of purchasing goods from Chinese suppliers, after making payment they were refused delivery, and in some cases the so-called “suppliers” simply vanished without a trace once the money was received.
In the earlier consultations, the payments involved were sample fees, typically around USD 1,000. Faced with the high cost of pursuing legal remedies, the inquirers chose to write the loss off and let the matter drop. However, the most recent case involves an amount exceeding USD 100,000, and the client has formally engaged me to recover the payment. The case is currently in progress, and I may share updates on its development in the future.
In the course of preliminary analysis of these cases, through investigation of the suppliers’ corporate background, registration records, shareholding structure, and litigation history, I found that the qualifications of these suppliers were riddled with serious defects—for example, fabricated operational information, fabricated performance capacity, sham shareholding structures (placing individuals with no real capacity to perform as shareholders or legal representatives), and prior records of breach of contract and litigation.
Such conduct may constitute the crime of contract fraud (合同诈骗罪) or fraud (诈骗罪) under Chinese law. Yet these tactics would rarely succeed against domestic Chinese clients—local clients, or the legal practitioners they retain, can verify information and mitigate risk through multiple channels.
It is precisely this information asymmetry that these suppliers exploit to defraud overseas clients. The harm extends beyond the financial and time costs borne by the victims; it also damages the international reputation of Chinese merchants as a whole.
As a licensed Chinese lawyer, I have decided to launch this website—to put my professional expertise and lawful means of accessing information to use, helping foreign clients of Chinese enterprises avoid risk, and helping those who have already suffered losses to safeguard their rights to the fullest extent possible.