Managing Contract Risks with Chinese Exporters
Introduction Many international buyers working with Chinese suppliers mistakenly assume that if the English name on a contract matches the supplier they know, the contracting party is properly identified. This misunderstanding, combined with legal differences, cultural gaps, and language barriers, can cause serious problems when disputes arise. A common issue emerges only after a dispute: the foreign buyer realizes that the party they contracted with is not the mainland Chinese manufacturer they thought. Instead, the contract signer and payment recipient is an offshore company registered in places like the British Virgin Islands (BVI), the Cayman Islands, or Hong Kong, which simply shares the same English name as the Chinese supplier. Adding to the confusion, the contract seal is often not the typical red circular seal of a Chinese domestic company but a square blue chop or black circular stamp, which buyers may mistakenly accept as legitimate. This mismatch creates a
