Chinese Buyer Has Not Paid: Claiming Interest and Late-Payment Losses

A foreign seller has delivered goods, but the Chinese buyer has missed the payment deadline. The outstanding price and the cost of late payment are separate parts of the claim. A seller may be entitled to interest or overdue-payment losses even if the invoice says nothing about interest, but the rate, starting date and calculation require a legal and evidential basis.

This guide addresses business-to-business sales of goods. It does not treat an unpaid invoice as a private loan, or assume that one Chinese domestic rate governs every foreign-currency sale.

1. Identify the governing rules before selecting a rate

Check the parties’ places of business, governing-law clause, dispute-resolution clause and any exclusion of the United Nations Convention on Contracts for the International Sale of Goods (CISG). Where the CISG applies, Article 78 provides an entitlement to interest on an unpaid price or other sum in arrears, without itself specifying the rate. Article 59 addresses payment at the time fixed by or determinable from the contract and Convention, without requiring a request or other formality.

The CISG has applied to China since 1 January 1988. China retains a declaration concerning Article 1(1)(b); applicability cannot be decided solely from the buyer’s location. Nor does a choice of Chinese law automatically exclude the Convention. In Chinese courts, the Supreme People’s Court’s treaty interpretation, effective 1 January 2024, requires the treaty framework to be considered. The interest rate still needs a reasoned basis under the relevant contract and applicable rules; Article 78 is not a universal numerical rate.

Where Chinese domestic sales rules govern the issue, the Civil Code and the sales-contract judicial interpretation provide a different starting point. These routes should be analysed before preparing a demand, not combined indiscriminately. See the official CISG text, treaty status and declarations and Chinese treaty interpretation.

2. An agreed late-payment clause comes first, subject to review

Read the signed contract, accepted order terms and later settlement together. A rate printed only on a seller’s invoice is not necessarily an agreed contract term. Identify whether the clause uses a daily or annual rate, which principal it covers, whether it has a cap, and what event starts the calculation.

Where Chinese domestic law applies, Civil Code Article 585 permits agreed damages and adjustment on a party’s request: an amount below the loss may be increased, while one excessively above the loss may be appropriately reduced. The contract-general judicial interpretation, effective 5 December 2023, addresses proof and adjustment in Articles 64–65. A high contractual rate is not a guaranteed award, and describing it as interest does not resolve its legal character.

Article 18 of the sales interpretation also matters when payment dates change or parties sign account confirmations. A changed deadline changes the starting point of agreed late-payment damages. Merely accepting the price without demanding those damages does not, by itself, defeat the contractual claim. A later document that changes principal or interest arrangements, or expressly records their amounts, needs separate review. See the Civil Code and contract-general interpretation.

3. No agreed clause does not necessarily mean no compensation

Under Article 18 of the sales interpretation, when the contract does not stipulate late-payment damages or their calculation method and the seller claims loss caused by the buyer’s payment default, the court may use a specified benchmark. For defaults within the post-20 August 2019 limb of that provision, it may take the one-year Loan Prime Rate (LPR) published by the authorised National Interbank Funding Center at the time of default and add 30–50% of that rate. Older defaults are addressed by the provision’s earlier benchmark-lending-rate limb.

The uplift is not 30–50 percentage points, and the court’s wording is permissive rather than a promise of the maximum. Keep the historical benchmark and its official publication date in the evidence file. A seller should not simply substitute today’s LPR, import the private-lending interest ceiling, or apply a renminbi benchmark to a foreign-currency claim without explaining why the proposed method is legally appropriate. The 2020 amendment took effect on 1 January 2021; its official text includes the revised sales interpretation.

4. Calculate each principal balance and period separately

Use a schedule for each invoice or agreed instalment: due date, amount due, credits, actual receipts, allocation of each receipt and remaining balance. An invoice date is not necessarily a payment due date. Delivery, acceptance, documentary conditions and any genuine quality deduction or set-off can change what was payable and when. See the related guide on quality deductions and set-off.

Illustration only: assume a legally supported calculation uses RMB 100,000 outstanding for 60 chargeable days, simple interest, an agreed 365-day denominator, a hypothetical benchmark of 3.00% per year and an accepted 40% uplift. The resulting annual rate is 4.20%, and the amount is 100,000 × 4.20% × 60 ÷ 365 = RMB 690.41, rounded to cents. Neither the benchmark nor the uplift is stated as today’s rate or the outcome of a real case. The denominator and dates are assumptions, not a universal court formula.

If a partial receipt occurs, first determine its allocation under the contract and applicable rules; only then reduce the relevant principal and split the periods. Do not automatically treat every receipt as principal, capitalise unpaid interest, or add overlapping interest, agreed damages and funding losses. CISG Article 78 preserves a claim for damages under Article 74, but separate recoverable loss and the absence of double recovery still need to be demonstrated.

5. Prepare evidence that supports both entitlement and arithmetic

Evidence	What it should establish
Contract and accepted order terms	Buyer identity, governing rules, currency, payment trigger and any agreed default charge.
Delivery and acceptance records	Performance of the relevant payment conditions, with any live delivery or quality dispute identified.
Invoices, account confirmations and receipts	Each balance, credit and partial payment, including the agreed or legally justified allocation.
Rate and calculation schedule	The legal basis, historical benchmark evidence, start/end dates, units, denominator and rounding.
Demands and later agreements	Delivery of notices, deadline changes, reservations or waivers, and any distinct additional loss.

Preserve original electronic records and attachments, not just selected screenshots. A demand can state the principal separately from the amount calculated to a specified date and the proposed continuing method. Review the forum and limitation period promptly; adding an interest line does not solve either issue. If the buyer proposes a new schedule, the guide on instalment arrangements explains the terms that need to be preserved.

6. Move from a calculation to a realistic recovery plan

Before demanding a single total, identify the defensible principal, the interest or damages route, disputed items and the evidence still missing. Then compare negotiation, arbitration or litigation with the debtor’s available assets and the cost of recovery. The broader guide to Chinese buyer payment defaults covers those options.

For an initial discussion, provide the parties’ legal names and countries, contract and dispute clause, amount and currency, payment deadline, delivery status, receipts and the result sought. Sensitive materials can be discussed after the initial conflict check. Jianxing Pan can assess the available route; service scope, fees and engagement arrangements must be confirmed before representation begins. Sending an enquiry does not itself establish an engagement.

See cross-border business legal services or contact Jianxing Pan, including panjianxing46@gmail.com.

Law and official sources checked on 2 October 2026. General information, not an opinion on a specific claim. Cover: AI-generated conceptual illustration, not a real client, case or shipment photograph.

Author: Jianxing Pan
Partner, Beijing ChangAn Law Firm; working in Beijing and Shenzhen.