Non-conforming goods: what to do with a Chinese supplier

A dispute is rarely won by the tone of discussion; it is won on evidence. When opening cartons, photograph pallets, markings and defects, and film the opening in one continuous motion. Gather the proforma, the purchase order, the validation exchanges and especially the reference sample, which will serve as a benchmark throughout the negotiation. A dated report from the first days is hard to contest; a report reconstructed weeks later, almost never.

Then quantify. Count the defective pieces and classify the defects into two categories: major defects, which make the product unsaleable or dangerous, and minor defects, which still allow it to be sold. A mostly defective batch is not negotiated like one affected by a fraction of defective pieces. This written count is what the factory will take seriously, and what an inspection body will ask for before intervening on site.

First, review the proforma invoice and the purchase contract: quality clauses, approved sample, penalties, claim procedure, applicable law, arbitration clause. Many proforma invoices are silent on these points, and that is where default law takes over. The CISG, the United Nations Convention on Contracts for the International Sale of Goods, applies by default between a French company and a Chinese company, both states having ratified it.

Two provisions structure the dispute. Article 38 requires the goods to be examined within as short a period as is practicable. Article 39 requires the buyer to notify the seller of any non-conformity within a reasonable time, no later than two years after delivery of the goods; after this limit, the buyer loses the right to invoke it. In practice, the effective time limit is much shorter: a claim made within days of receipt holds, while a late claim is countered by handling, transport or use that could explain everything.

The first lever is the balance. As long as the goods are not paid in full, negotiation takes place on an equal footing: a factory waiting for its balance is more willing to negotiate than a factory already paid. This is why experienced buyers pay in two stages: a deposit with the order, then a balance released after a pre-shipment inspection. Full payment before shipment then turns the dispute into a plea for leniency.

The second lever is future volume. A factory that hopes for your next orders makes a profitability calculation, not a question of principle. Invoice discount, sorting or rework of defective pieces, partial remanufacturing, credit for the batch against the next order: these outcomes are frequently achievable, sometimes combined. Conduct the discussion in writing, with the count as supporting evidence, and in Chinese to bypass the filter of the sales representative who translates as they see fit.

Finally, give your counterpart an honorable way out: a claim lodged as an accusation closes the discussion, while the same claim presented as a problem to solve for the next order unlocks a discount.

The first formal step costs nothing: the written formal notice. It recaps the facts, references the contract and the sample, states the specific request, sets a response deadline, and lists the attachments. It prepares everything that follows and shows that the case is being managed. If the factory remains unresponsive, the litigation route depends on the arbitration clause: many Chinese contracts provide for arbitration in China, for example before CIETAC, and others in Hong Kong before HKIAC.

The decisive point is enforcement. An arbitral award rendered in China or Hong Kong is more easily recognized than a foreign judgment: France and China are parties to the 1958 New York Convention, which facilitates the recognition of arbitral awards. A judgment rendered by a French court, for its part, remains difficult to enforce in China. Before initiating proceedings, compare the cost of litigation with the amount actually recoverable: for many quality disputes, negotiation backed by documented pressure remains the realistic route.

Most disputes over non-conforming goods are settled before the container departs, when rejecting a batch costs the factory and does not yet cost you. A signed reference sample, precise specifications, a pre-shipment inspection on an AQL sampling plan, with a threshold of around 2.5 for major defects in consumer goods: this three-part approach detects the failing lot while it is still in the factory. Before loading, you have the power to refuse; after arrival, only negotiation remains.

The payment structure does the rest: a reasonable deposit at order, a balance triggered after a conclusive inspection, never full payment before departure. Upon receipt, open and inspect the first cartons while the claim is still admissible, and keep all exchanges. A case documented as you go settles much better than one reconstructed after the fact.

A compliance dispute fares better on familiar ground. Our brokerage and sourcing house has a sinophone team in Guangzhou, who files the claim in Chinese with the quality manager and the factory head, along with photos, the defect count, and the reference sample. We do not speak Chinese ourselves, and that is precisely why this team exists. They assess on site what is negotiable, obtain discounts and remanufactures, and then inspect the replacement batch before it leaves the workshop.

In most cases, you pay no fees: you open a case, we negotiate the goods for you and we take a commission on their ex-works value. This logic also applies upstream, with a supplier check before the order and a pre-loading inspection before the balance, so that the next batch arrives compliant.