The most common way to pay Chinese suppliers is a T/T (bank transfer) with a 30% deposit and 70% balance against shipping documents or after inspection. Letters of credit suit large orders, escrow and Trade Assurance protect smaller ones, and you should never pay 100% up front. Payment terms are a risk-management tool, not just an admin step.
Common Payment Methods
| Method | How it works | Best for |
|---|---|---|
| T/T (bank transfer) | Deposit + balance by wire | Most orders; standard in China |
| Letter of Credit (L/C) | Bank guarantees payment on documents | Large orders, new relationships |
| D/P (Documents against Payment) | Buyer pays to receive shipping docs | Medium trust, ongoing trade |
| Escrow / Trade Assurance | Third party holds funds until delivery | Smaller orders, first-time buyers |
The Standard 30/70 Structure
The conventional structure is a 30% deposit to start production and 70% balance on presentation of shipping documents — ideally after a passed pre-shipment inspection. This keeps the factory committed while preserving your leverage: if goods fail inspection, you still hold most of the payment.
Why You Should Never Pay 100% Up Front
Paying in full before production or shipment removes every lever you have if goods are late, defective, or never shipped. A demand for 100% up front — especially from a new supplier — is a serious risk indicator. Tie the balance to inspection wherever possible.
Safe Payment Practices
- Pay only to a bank account in the registered company name (mismatch = stop).
- Tie the final payment to a passed inspection where you can.
- Use L/C or escrow for large or first-time orders.
- Keep payment terms in the written purchase order, not just chat.
See avoiding supplier fraud for payment scams to watch for.
Key Takeaways
- 30% deposit / 70% on documents is the China standard.
- Never pay 100% up front.
- Pay only to the registered company's bank account.
- Tie the balance to a passed inspection where possible.