The currency is managed, which means a transfer abroad is not a simple instruction from an account holder to a bank. The customer's bank has to satisfy itself that the payment corresponds to a real transaction of a permitted kind, documented. It is not being obstructive: it carries the responsibility for letting the money out. The consequence for you is indirect and it is the whole subject — your payment depends on a file assembled by somebody in your customer's finance department, sometimes a junior with other work, and the file is where the delay lives.
Exchange control, in practice rather than in principle
Money circulates freely inside the country and crosses the border against evidence. The evidence has to show what the payment is for, that the underlying transaction took place, and that the tax consequences of it have been dealt with. For goods that have been imported, this is relatively mechanical: the customs declaration and the transport documents exist and they say what happened. For services it is harder, because there is nothing physical to point at, and the bank has to form a view from a contract and a description.
This creates a sequence that is invisible from Europe. The commercial agreement, then the internal approval inside the customer, then the assembly of the bank file, then the bank's review, then the transfer, then the correspondent banks on the way to your account. Each stage has its own duration and its own way of stalling, and the only one you can see is the last. When you are told the payment is being processed, the honest translation is that it is somewhere in that sequence — and knowing where is the difference between waiting and helping.
What the bank asks your customer for
- The contract. Signed and chopped, with amounts and payment terms that match the invoice. A contract saying one thing and an invoice saying another stops the file where it stands, and the query comes back to your customer rather than to you.
- Your invoice. In the name of the entity that will receive the money. If the payer is not the entity you contracted with — an affiliate, a group purchasing company — say so and document it before the payment is attempted, not after it is rejected.
- Proof of the import, for goods. The customs declaration and the transport documents, consistent with the invoice down to the description and the quantities. This part is usually straightforward, which is why goods are paid for more predictably than services.
- For a service, the nature of the work and its tax treatment. What was performed and where, and evidence that any withholding due on the payment has been handled. Until that is settled, the remainder does not leave, and your customer may ask you for documents you did not expect to provide.
- The exact beneficiary details. The name on your bank account must match the name on the invoice and on the contract, word for word. An abbreviation, a trading name, an account held by a sister company: each of those is a returned payment and a new file, weeks later.
Between « it is paid » and « it has arrived »
The two sentences mean different things and both are said in good faith. For your customer, paid frequently means approved internally: the invoice has gone through the chain of signatures and the amount is committed. The bank file may not yet be complete. Once the instruction is given, the review takes its own time, the transfer then crosses one or more correspondent banks, and a mismatched beneficiary name can send the whole thing back weeks later — the money is not lost, it reappears in your customer's account, but the clock restarts from the beginning. The quiet periods add to it: the days around the new year holiday, and the closings when finance departments and banks have other priorities.
Which is why the useful question is not when the payment will arrive. Ask for the date the bank instruction was given and the reference of the transfer. A customer who gives you both has sent it, and you can then chase your own bank. A customer who cannot is telling you, without meaning to, that the file is still being put together — a different problem with a different remedy, since what it needs from you is a document, not a reminder. Asking which document is missing turns a dead exchange into a task.
When you have no entity in China
Most of the practical difficulty of being paid from China is a difficulty of not being there. Each of the usual answers works, and each of them solves something different while leaving something else untouched, so the choice follows from what you actually need rather than from which one sounds simplest.
| Route | What it solves | What it leaves unsolved |
|---|---|---|
| A Hong Kong company | A straightforward account to be paid into, contracts signed in a familiar legal environment, and a currency your customer's bank is used to sending | The customer's own file and its tax obligations: the payment is still an outgoing cross-border transfer, and no fapiao comes out of it |
| An importing distributor | Everything on the Chinese side — the import, the local invoicing, the collection from end customers — and you invoice one party, abroad | Your visibility and your margin: the relationship, the price to the end customer and the market knowledge are now theirs |
| A cross-border payment platform | Collection for small amounts and for online sales, with less friction than a bank transfer each time | Large business-to-business invoices and any payment your customer must document in full: its bank file does not go away because the channel changed |
| Your own Chinese entity | Local invoicing with fapiao, payment in local currency without a cross-border file, and a position from which you can hold certificates and contracts | Getting the profits out: money inside the entity is subject to its own rules before it can be distributed abroad, and the structure costs money every month |
One temptation deserves naming because it is offered sincerely and regularly: being asked to accept payment into an unrelated account, a personal one, or through a third party who happens to have foreign currency available. It works once. It leaves your customer with a payment it cannot justify in an audit and you with money whose origin you cannot document to your own bank, and the first person to pay for that is the customer — which is to say the next order goes to someone whose paperwork was boring.
Deposits, terms, and the delays that are not refusals
A deposit is normal and asking for one is not an insult. What matters more than its size is what the rest of the payment is attached to. A term expressed in days runs from a date somebody chooses and can always be read generously; a term attached to an event is either satisfied or not. Payment against documents, payment before the goods are released, payment before a certificate or a registration is transferred into the customer's name: each of those is a sentence a finance department cannot soften. And negotiate them while you still have something the customer wants, which is before the shipment rather than after it.
One habit pays for itself: ask at the contract stage who inside the customer's organisation assembles the bank file, and get that person into the correspondence. They are rarely your commercial contact, they are the one who will ask for a missing document, and a question they can put directly to you is a question answered in an afternoon instead of a fortnight. The same courtesy applies in reverse: send the documents in the form their bank expects, and send them before being asked.
Finally, learn to read the two kinds of silence, because the remedies are opposite. A customer with a procedural problem asks questions: it requests a corrected document, forwards a query from its bank, explains that an approval is pending, gives you a name. A customer that has decided not to pay goes quiet, moves the subject to a dispute about quality that was never raised before, or reappears with a request to renegotiate. The first is helped with paperwork and patience and will pay. The second is handled by stopping the next shipment while that still means something, and the longer you treat it as the first, the less there is left to stop.
Before the first shipment, ask your customer's finance department three things in writing: the exact name of the entity that will pay, the documents its bank will require, and who assembles that file. Those answers tell you more about when you will actually be paid than any payment term in the contract, and they are free to obtain at the moment when the customer still wants something from you.