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How To Pay Your Chinese Supplier.

By Dan Harris and Steve Dickinson

In its post, "Paying your Chinese Supplier ? Know your payment terms and options in advance," SourceJuice does a yeoman like job setting out the various options for paying a Chinese supplier. The post explains the following options, and describes the risks of each:

-- Advance, Cash in Advance or Cash Advance ? these are known as payment in advance terms -- Telegraphic Transfer, Telex Transfer, Bank Wire Transfers ? these are known as T/T or TT payment terms -- Wire and Funds Transfer Services like Western Union and Money Gram Internet payment companies like PayPal.com, Moneybookers.com, and Escrow.com -- Letter of Credit and the various options that banks offer on these instruments ? these are known as LCs, L/C, or LC payment terms -- Documentary Collections like Documents Against Acceptance or Documents Against Payment ? these are known as DA or DP payment terms and sometimes referred to as -- ?Bills of Collection? or ?Bills of Exchange? -- Open Account or Pay Post Receipt or Goods in Advance ? When the Seller provides you Credit

I strongly urge anyone who buys from China to read SourceJuice's post in full. The one thing I would add to it is the advice to have a written contract (preferably in Chinese) with your Chinese supplier. In many cases, such a contract is necessary for you to be able to pursue a refund for bad product.

Full post as published by China Law Blog on October 21, 2008 (boomark / email).