China's Big Order Scam: How It Works and How to Stay Safe

After two decades of sourcing in China, I've seen scams evolve from obvious tricks to sophisticated long-term cons. The 'Big Order Scam' now preys on trust built over multiple successful transactions, making it one of the most dangerous traps for importers. Here's how this new variation works and how you can protect your business without losing a major deal.

China Big Order Scam – how do the Chinese scam exporters?

Some years ago, the “Guilin Business Scam” was quite popular. It usually begins with the Chinese company showing a big interest in your products. The usual negotiations follow; the Chinese ask for samples, want a better price, etc., but in the end, they inform you that they will make a huge purchase. The condition is that in order to sign a contract, your company representatives must go to China.

When it happens, the Chinese company books hotels and tables in expensive restaurants. There are always some “notarization fees” that you should cover. You are asked to pay all the bills and some bribes to local officials. The company has no other chance but to cover the expense to secure a big deal worth hundreds of thousands of dollars.

How does it end?

In the end, no contract is made, or the contract is unlawful or invalid. The scammers made money because they made agreements with restaurants and hotels, and the price was inflated.

From the scammers’ perspective, the most crucial aim is to build trust in the potential victim. In the case of the “Guilin Scam,” the scammers pretended to be a legitimate company by faking the negotiation process. But since the foreign parties are getting suspicious and have more tools to verify the Chinese company, the scammers change their way of operations.

A new type of China scam

The new scam also involves the perspective of big profits. The foreign company meets the Chinese company during a trade fair show or in Europe/the US. Samples ordered from China are of good quality, the negotiations follow, and the first order – usually small – is placed. When the first order arrives, the quality is good enough.

What is more, the second order is also of good quality. The foreign party is sure that the supplier is reliable. What will possibly happen later? Most likely, the supplier will offer discounts. Since cooperation has been beneficial so far, a big order is placed. The thing is, it never arrives. The company disappears, and will not answer phone calls, e-mails…

How to protect yourself against China scams?

Most probably, it was a trading company without a factory. It is relatively easy to shut down the trading company entirely and leave no traces behind.

Most likely, you neglected an important step: verifying the Chinese company. Use an independent due-diligence service that involves a risk check. If something goes wrong, you will know the company’s registration data, including the name of its legal representative, and it should be enough to sue them. Do not dismiss this option: the Chinese judicial system has undergone a long way of reform and improvement, and in many cases, you can achieve the desired goal (but rarely a total compensation).

No matter how good your relationship with a supplier seems, never skip independent verification before placing a large order. A simple factory inspection or background check can reveal if you're dealing with a legitimate manufacturer or a trading company that could vanish overnight. At China-Check, we offer supplier verification and on-site audits to give you peace of mind when the stakes are high.