Contracting with a Chinese supplier: what holds and what does not
A purchase order signed by email is reassuring, but binds little. Four elements decide what an agreement is really worth on the day you need it — and none of them is intuitive from Europe.
Updated September 2026
The red chop, not the signature
In China it is the company chop — a round red seal, registered with the authorities — that binds the company. It plays the role a director's signature plays in Europe: it expresses the will of the legal person.
The consequence is direct. A document carrying only a salesperson's handwritten signature leaves the door open to the most convenient argument: that person had no authority to bind the company. With the chop applied, the argument falls away.
Two checks are worth making: that the chop carries the exact Chinese registered name of the company you believe you are dealing with, and that it is the company's official chop rather than a departmental one, whose scope is narrower.
The language of the contract is the language of the court
Chinese is the only language of Chinese courts. A contract drafted in English alone will have to be translated to be produced, and that translation will not be yours: it will be prepared within the proceedings, on terms you did not choose.
The practice is therefore the bilingual contract, column against column, with a clause designating which version prevails in case of divergence. Asking for that to be the English version is a negotiating position; accepting Chinese is not a capitulation, provided that version has been reviewed.
The point not to neglect: a loose translation manufactures divergences where the parties believed they had agreed. Technical terms and numerical thresholds deserve review by someone who understands both the languages and the product.
The name that counts is not the one on the marketplace
Chinese manufacturers readily present themselves under an English trading name, chosen for export and with no legal existence. That name identifies nobody: it cannot be sued, its registration cannot be checked, its business licence cannot be verified.
What must be obtained and carried into the contract is the registered Chinese company name, in characters, as it appears on the business licence. It is that name which appears on the chop, which allows the register to be searched, and which identifies the defendant.
A supplier that hesitates to give it has already told you something.
Choosing the jurisdiction, and knowing why
The reflex is to impose your own law and your own courts. That is often the worst operational choice: a judgment obtained at home against a Chinese company will still have to be recognised and then enforced in China, a long process with an uncertain outcome.
Designating a Chinese court seems counter-intuitive, but allows action directly where the supplier's assets sit — bank accounts, machinery, stock. That is the only thing that makes a judgment useful.
The choice depends on the amount at stake, the supplier's profile and what you are prepared to spend. It is discussed with a lawyer, before signature: it cannot be repaired afterwards.
Frequently asked questions
- Is a contract signed by email worth anything in China?
It is a starting point for evidence, but a fragile one. Chinese practice makes a company's commitment rest on the application of its official chop, a round red seal registered with the authorities. A document carrying only a counterpart's handwritten signature exposes you to the argument that the person had no authority to bind the company.
- What is a Chinese company chop?
A round red seal, registered with the authorities, which plays for a Chinese company the role a legal representative's signature plays in Europe: it expresses the legal person's commitment. It must carry the company's exact Chinese registered name, and you should make sure it is the official company chop rather than a departmental one.
- Should the contract be drafted in Chinese?
Before a Chinese court, yes. Chinese is the only language admitted there: a text drafted in English alone will have to be translated to be produced, and that translation will be prepared within the proceedings, on terms you did not choose. Having the Chinese version reviewed by someone who understands the product costs infinitely less than discovering a divergence mid-case.
- Which company name should appear in the contract?
The registered Chinese company name, in characters, as it appears on the business licence — not the English trading name used for export, which has no legal existence. It is that name which appears on the chop, which allows the company register to be searched, and which identifies the party against whom action would be brought.
- Should I provide for a home court or a Chinese one?
The question deserves to be put to a lawyer before signature, because the two options do not have the same practical effect. A judgment given at home against a Chinese company will still have to be recognised and then enforced in China. Designating a Chinese court, by contrast, allows action where the supplier's assets sit — accounts, machinery, stock.
- Is a purchase order enough, or do I need a real contract?
It depends on what is at stake. On a first order of modest value, a detailed and chopped pro forma invoice already provides a base. As soon as there is tooling financed, a design to protect, recurring volume or a critical lead time, a separate contract is needed — because a pro forma says nothing about penalties, mould ownership or confidentiality.
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