Chinese Supplier Raised Price After Deposit: What Can You Do?

You paid the deposit. Production started. Then the message arrives: raw materials cost more, the unit price goes up 15%, and nothing ships until you pay the difference.

The timing is not an accident. Your delivery date is close, your customers are waiting, and switching factories may cost more than the increase. The supplier knows all of that — which is why the demand came after your deposit, not before.

One warning before anything else: what you do in the next few days becomes evidence. A rushed reply, a signed supplement, a payment made “to keep things moving” — each can later prove you accepted the new price. So work through a sequence: preserve the demand, find out what changed, check whether the original price binds, do the math, and trade concessions only for delivery protection.

Do not accept or reject yet — create the record

Keep the supplier talking, in writing. Preserve the complete email, WeChat, or platform thread — account identity, timestamps, attachments, and the messages around the demand. If the negotiation lives on WeChat, see the guide to preserving WeChat evidence.

Your first response should reject any assumption of consent without turning the exchange into a fight:

We do not agree to any price change at this stage. Please identify the contractual basis, provide the calculation and supporting documents, and confirm whether you will perform the order at the agreed price and delivery date.

This one message does four jobs: it records your objection, restates the original bargain, demands proof, and forces the supplier to say whether it is renegotiating or refusing to perform. Those are two very different legal positions — make the supplier pick one in writing.

Two don’ts. Do not accuse the supplier of fraud before the facts support it — you may still need this factory. Do not say you will “probably pay” while asking for a discount — every message in this thread can later be read as evidence of whether you agreed to amend the contract.

First find out what actually changed

Not every price demand is a shakedown. Work out which of four situations you are in.

You changed the order. Revised specifications, quantity, packaging, testing, delivery method, destination, or schedule can justify a new quotation. Separate your changes from the supplier’s own cost problem.

The contract already allows adjustment. Check for raw-material indices, exchange-rate bands, freight or tariff clauses, quote-validity periods, and notice requirements. Even then, the supplier must show the agreed calculation — an adjustment clause is not a blank cheque. If this is really about import duties or DDP pricing, see who bears a mid-order tariff increase.

Something unusual happened in the market. Make the supplier show its work: the affected cost item, the baseline, the date and size of the move, invoices or indices, and the unit-cost calculation. A real increase explains the request; it does not create a right to impose it. And beware the phrase “force majeure” — under PRC law that means an unforeseeable, unavoidable, and insurmountable event (Civil Code Articles 180 and 590). Rising material prices are ordinary commercial risk. More expensive is not impossible.

The demand is leverage — or a distress signal. Check the company’s business licence, Unified Social Credit Code, abnormal-operation entries, and public enforcement records. These do not prove insolvency, but they should change how much more money you are willing to send.

Does the original price legally bind the supplier?

Now the legal question. Read the transaction as a document chain, not a single file: signed contract, purchase order, pro forma invoice, deposit record, specifications, delivery promises, and the messages confirming production started.

Do not be misled by labels. A PI is not binding — or non-binding — because of the word at the top; what matters is its terms, acceptance, payment, and how both sides performed afterwards. Also confirm the documented seller is the same Chinese legal entity that received your money.

Under Articles 543 and 544PRC Civil Code · Articles 543–544A contract may be amended by mutual agreement. If the amendment is unclear, the contract is presumed unchanged.Official text · SPC ↗  of the PRC Civil Code, a contract changes only by agreement , and an unclear amendment is presumed to have changed nothing. In plain terms: if your documents fix the price and no adjustment clause applies, the supplier cannot replace that price by sending a notice.

The supplier’s strongest argument is the doctrine of changed circumstances . Article 533PRC Civil Code · Article 533After a fundamental, unforeseeable change outside ordinary commercial risk, the parties should renegotiate. A court or tribunal—not one party—may modify or terminate the contract.Official text · SPC ↗  allows relief after a fundamental, unforeseeable change beyond ordinary commercial risk that makes performance manifestly unfair. The SPC Interpretation, Article 32SPC Contract Interpretation · Article 32Abnormal policy or supply-and-demand changes may qualify, while ordinary price fluctuation and foreseeable high-volatility risks remain commercial risk.Official text · SPC Gazette ↗  draws the line: abnormal policy or supply-and-demand shocks may qualify; normal price fluctuation stays the supplier’s own risk. And note the mechanism — renegotiate first, then a court or arbitral tribunal decides whether to modify or terminate. Nothing in it lets the supplier declare a new price and hold your goods until you pay.

One more check: for many international sales the CISG applies unless the parties excluded it, and CISG Article 29 likewise treats modification as a matter of agreement. Read the governing-law and dispute-resolution clauses before sending any legal notice.

Check what your “deposit” actually is — it may be worth double

While the documents are open, check how the deposit is described. PRC law separates a dingjin (定金), which carries a statutory penalty, from an advance payment (预付款), which does not — a distinction the English word “deposit” hides.

Under Articles 586 to 588PRC Civil Code · Articles 586–588A dingjin deposit must be agreed in writing and takes effect on actual payment, capped at 20% of the contract value. If the party that received it fails to perform, it must return double the amount.Official text · SPC ↗  of the Civil Code, if the contract expressly agrees the payment as 定金 and the supplier then refuses to perform, it must return double the amount. The penalty function is capped at 20% of the contract value, and Article 588 lets you elect between the deposit penalty and a liquidated-damages clause.

Why this matters: 定金 language turns a refusal to ship into a double-refund claim — real leverage in a demand letter. A plain “30% deposit” with no penalty language is usually treated as an advance payment: recoverable if the contract fails, but not doubled. The deposit and balance payment guide walks through the distinction.

Pay, negotiate, or refuse? Do the math

Being legally right and commercially right are different questions. Put numbers next to each option:

• the additional amount demanded;
• the uncommitted balance still under your control;
• a credible replacement supplier’s price and lead time;
• duplicated sampling, testing, certification, and logistics costs;
• losses caused by delay — the provable and foreseeable ones;
• the probability and cost of recovering the deposit; and
• whether this supplier can realistically finish and ship at all.

Sometimes paying wins: a documented increase from a reliable supplier can cost less than restarting production. Sometimes it clearly does not: an unsupported increase after missed milestones is often the first request, not the last.

Treat the paid deposit as a sunk cost when deciding whether to send more. It stays in your legal claim — but it should never make an unsafe payment look rational.

Can you withhold the unpaid balance meanwhile? Yes — if you have concrete evidence that the supplier’s ability to perform has seriously deteriorated: abnormal-operation listings, enforcement records, a stopped production line. Articles 527 and 528PRC Civil Code · Articles 527–528A party owing later performance may suspend it, with notice, on concrete evidence that the other party's ability to perform has seriously deteriorated, and may demand adequate assurance before resuming.Official text · SPC ↗  let the later-performing party suspend and demand adequate assurance ; CISG Article 71 is similar. The limits: real evidence, prompt notice, and resume once proper assurance is given. Withhold on a hunch, and you hand the supplier its breach argument.

If you negotiate, do not give without getting

One rule: every concession must buy something you can measure. Depending on the order, that may mean:

• a capped, one-time increase supported by specified cost documents;
• shipment of the completed portion before any additional payment;
• payment of the increase only against inspection, dispatch, or agreed shipping documents;
• a final delivery date with defined consequences for another delay;
• a reduction in the remaining balance or another commercial concession; and
• confirmation that the adjustment does not carry over to future orders.

Put the result in a short written amendment — not a WeChat “ok.” State the old and new price, quantity, currency, payment milestones, delivery date, Incoterm and named place, and the consequences of another non-shipment. Have it executed by the correct Chinese entity with the agreed formalities and company chop, and preserve all unchanged terms.

For an Alibaba Trade Assurance order, keep the online order intact and negotiate in-platform where possible. Do not move the additional payment off-platform without checking the effect on your protection — the online order terms, payment route, evidence, and deadlines control the outcome. See Alibaba Trade Assurance Is Not Enough.

Paying “temporarily” may rewrite the deal

The tempting middle path: pay now, get the goods, claw the money back later. It is much harder than it sounds.

From the other side of a dispute, a signed supplement is direct evidence of amendment. Paying the higher amount and continuing the order can also show acceptance. A contemporaneous written objection helps show the payment was disputed — it does not override what looks like a clear agreement.

Nor is pressure the same as duress. Articles 150 and 151PRC Civil Code · Articles 150–151A party may seek rescission for an act induced by duress, or where distress or lack of judgment was exploited to produce manifest unfairness.Official text · SPC ↗  provide remedies for duress and for exploitation of distress producing obvious unfairness, but the standards are fact-intensive: a tight deadline and an expensive alternative are not enough. Article 152 adds a clock — the right to rescind lapses one year after the coercion ends.

If you must pay, define what the payment means before transferring it: an agreed one-time amendment, a conditional payment tied to shipment, or a disputed amount with expressly reserved claims. The writing and the payment conduct must tell the same story.

If you refuse, set a deadline and preserve the remedy

Do not just argue in the chat. Send a formal notice that identifies the contract, price, deposit, delivery obligation, the supplier’s demand, and your rejection — and set a reasonable deadline for the supplier to confirm performance. Check the notice method, cure period, governing law, and dispute clause first.

The deadline matters because of what follows. An unequivocal statement that nothing ships unless you pay more may support an anticipatory-breach claim under Article 578PRC Civil Code · Article 578If a party clearly states or shows before the due date that it will not perform its principal obligation, the other party may claim breach liability before performance is due.Official text · SPC ↗  of the PRC Civil Code. But a missed deadline does not terminate the contract by itself: termination needs a contractual or legal basis, and the notice must match the remedy. Under the CISG, the additional-time and avoidance rules have their own conditions.

While the deadline runs, protect your position: get replacement quotations, keep evidence of reasonable mitigation, and check any Alibaba dispute deadline before it expires. Do not let informal promises blur the chronology.

If the supplier goes silent, follow the sequence for a supplier that ghosted after taking a deposit. If the contract is properly terminated but the money does not come back, review the refund and recovery routes.

Where the documents fix the price and the refusal is clear, a bilingual notice or Chinese supplier demand letter is often the cheapest way to test settlement — especially with a 定金 double-refund claim behind it. Demand a defined result, in a forum you can realistically use.

The sequence to remember

Preserve the price demand. Work out what actually changed. Check whether the original price was fixed — and whether your deposit carries the statutory dingjin penalty. Put real numbers on paying, negotiating, replacing, and recovering. Trade concessions only for defined delivery protection. And if the supplier walks away from the original bargain, escalate under the contract instead of improvising another payment.

If you want a fact-specific review, gather the contract or PI, payment records, the supplier’s registered Chinese name, specifications, delivery schedule, the price-demand messages, and any proposed amendment. Then contact me and we can assess the safest response.

References

This is Part 14 of the China Supply Chain Disputes — What Every Buyer Should Know series. Related reading: Supplier Ghosted After Deposit, Tariffs Jumped Mid-Order, and Chinese Supplier Refuses to Refund.