On the trail of the transaction.

Transferring money to a Chinese factory seems to be a simple matter – “sent by invoice and wait for shipment.”
But in fact, between the moment when the buyer clicks the “Send” button and the time when the manufacturer sees payment on his account, a whole chain of stages passes.
Each of them is important, affects the delivery time and can become a source of risk.

Understanding route helps to plan transactions correctly, protect their interests and save on commissions.

The main ways to transfer money to China

1. Bank Transfer (T/T – Telegraphic Transfer)

The most common option for B2B transactions.
The buyer transfers the money Swift to the settlement account of the factory specified in the invoice.

Features:

• used for official contracts;
• Suitable for amounts from $5,000;
• takes 1-3 banking days;
• requires precise details of the factory and indication of the purpose of payment.

2. Alibaba Trade Assurance (Made-in-China, 1688)

Platform performs guarantor Money is reserved and transferred to the supplier only after confirmation of shipment.

Features:

• Safe for new suppliers;
• commission is usually 2-3%;
• Delay in receipt - up to 5 working days.

3. Transfer through an intermediary or agency

Buyer pays Russian or international agentIt transfers money to a manufacturer in China or Hong Kong.

Features:

• Convenient method with restrictions on international transfers;
• There is no need to work directly with Chinese banks.
• There is a risk of fraud if the intermediary is not reliable.

4. Payment through an offshore account (Hong Kong, Singapore)

Some factories accept payment not to the mainland Chinese account, but to offshore.

Features:

• less foreign exchange control;
• rapid enrolment;
• The risk is higher if the payment is not in the name of the manufacturer.

How payment moves: a step-by-step route

Consider an example of a classical scheme T/T bank transfer via SWIFT.

Stage 1. The buyer forms the payment

After approval of the invoice and the contract, the buyer:

• enters the details of the factory (Beneficiary, Bank name, SWIFT, Account No.);
• indicates the appointment: Payment for goods under PI No. XXX / Contract No. XXXX;
• Pays a fee for international translation (usually $25-50).

Important: Even a small mistake in the name of the bank or the SWIFT code can cause money to hang in the middle account.

Stage 2. Sending bank (buyer's bank)

Bank checks payment for compliance sanctions and compliance requirements n:

• the country of the recipient (China is not under sanctions, but banks carefully check the country of origin of the money);
• purpose of payment (goods, service, advance);
• Conformity of data of the recipient and the contract.

At this stage, a delay of 1-2 days is possible. - especially for large amounts or transfers from controlled currency areas (for example, Russia → China).

Stage 3. Corresponding banks

If there is no direct relationship between banks, the payment goes through 1–3 correspondent banks.
They provide routing of funds in the SWIFT network.

Each of them may:

• withholding commission ($10–20);
• delay payment for verification;
• Change currency (for example, USD → CNH).

Here most often money is lost or “hang transfers” occur., especially if the payment order does not specify “charges: OUR” (i.e. all commissions are paid by the sender).

Stage 4. Recipient Bank (Receiving Bank)

The Chinese bank receives a notice of receipt of money.
Then it starts. Internal Currency Control (Waihui Guanli):

• the purpose of payment is checked;
• the contract and invoice data are verified;
• Confirmation is requested from the recipient.

Only after the approval of the currency department, the bank deposits money into the factory account.

This usually takes 1-2 days. But if something does not match (company name, contract number, amount), the bank can return the payment or delay it for verification.

Stage 5. Factory receives funds

When funds are credited, the factory sees them in its account in yuan or currency.
Only then does it begin production or shipment if the terms of the contract are such.

It's important to understand: payment is not considered to have been received from the moment of sendingeh since enrollment This can be a difference of 3-7 days.

Where the most common problems arise

1. Incorrect SWIFT or Beneficiary name The payment hinges on the correspondent bank.
2. Lack of communication between banks The transfer goes through a chain of intermediaries, increasing the term and commission.
3. Mistakes in making payment The Chinese bank cannot confirm the origin of the funds and blocks the transfer.
4. Lack of supporting documents The factory cannot provide a contract or invoice for foreign exchange control.
5. Holidays in China (e.g. New Year) All operations can slow down by 7-10 days.

How to protect payment and speed up enrollment

1. Always require official factory details

Check that the name of the recipient matches the name of the company in the contract and the seal on the PI.
If a factory offers to pay to a personal or offshore account, this is a wake-up call.

2. Use Trade Assurance or Letter of Credit

Payment is reserved until confirmation of shipment, which protects the buyer.

3. Include in the payment order "Charges: OUR"

So all the commissions fall on you, and the factory receives exactly the amount you transferred.

4. Send the Swift Copy factory

This is a document from the bank with a unique code MT103 - confirmation that the payment has been sent.
The factory will be able to show it to its bank to speed up enrollment.

5. Divide the payment into stages

• 30% prepayment – to start production;
• 70% after quality check or before shipment.
  This reduces the risk of losing money.

Alternative translation routes

Through a Hong Kong company

Many Chinese factories have affiliated companies in Hong Kongthrough which the currency is accepted.
Advantages:

• Fast transfers without currency controls;
• stable operation with USD and EUR;
• fewer bank checks.

Disadvantages:

• Formally, the money goes not to the manufacturer, but to a third party – you need a power of attorney and written confirmation of the connection.

Through an agency company in China

If you do not have a foreign exchange account, you can work through salesmanIt has accounts in China and Russia.
It accepts payment, converts and transfers to the yuan factory.
Important: Work only on commission or agency agreement with transparent reporting.

Terms and commissions depending on the method

Transferring money to China is not just an operation, it is chain of actions of several banks, currency controllers and intermediaries.
To make the payment quickly and without loss:

1. Work only according to official details.
2. Check each stage - from the appointment of payment to the confirmation of enrollment.
3. Use secure tools like a letter of credit, Trade Assurance or pre-payment inspection.

Understanding the transaction route is not just accounting literacy, but an element of strategic supply control.
One who knows, Where and how his money goesIt manages not only payments but also the entire supply chain.