Direct answer

An agent acts for the principal; a distributor buys and resells for its own account.

Under the Civil Code, an agent may be authorised to negotiate or to conclude contracts in the principal’s name. Whether the Chinese counterpart is an agent or a distributor turns on invoices, inventory risk, and whose name binds the customer. Authority to chop or sign for the principal is a separate, high-risk grant. Termination should deal with pipeline deals, commission already earned, materials, and any lingering apparent authority. Labour and commercial-bribery overlays apply if the ‘agent’ is in substance an employee or a channel for improper payments.

The classification screen

4 questions before you choose the route.

This page identifies the right question and evidence. It does not determine the legal outcome on a reader’s facts.

01

Who contracts with the end customer?

Principal’s name versus agent’s name is the first split from distribution.

Name
02

What may the agent bind you to?

Introduce-only, quote-only, or full signature and chop authority.

Authority
03

How is money earned?

Commission on order, on payment, or a retainer plus success fee.

Pay
04

What remains after termination?

Pipeline commission, samples, WeChat groups and apparent authority to the market.

Exit

Working rule: Map the regulated role before marketing or launch in China.

What changes the answer

The signal ledger.

These facts move the question beyond a label and into a product, money-flow and control analysis.

Signal
Ask the operating question
Why it changes the route
Apparent authority
Have you given name cards, chops, or a shop that makes the agent look like your company?
The principal can be bound even beyond the private POA.
Labour overlay
Is the person working full time, under your rules, with no other principal?
Mislabelled ‘agents’ become employment and social-insurance files.
Bribery channel
Does commission sit on top of hospital, SOE or tender relationships?
Agency plus public-sector sales is an investigations overlay, not only contract.
Prepare before you escalate

Bring a compact evidence docket—not a pitch deck.

Give a compliance team or counsel the operating facts that reveal the perimeter.

01Appointment and POAScope, term, territory, and whether the agent may execute contracts.
02Customer paperWhose chop is on the customer contract and invoice.
03Commission fileTrigger, clawback, and any side letters on WeChat.
04Market-facing kitCards, chops, email domains and shop registrations you issued.
Common confusions

Questions people ask before they build.

Short answers for orientation. The right result can change with the service model and current rules.

Do China commercial agents get EU-style indemnity on termination?

There is no automatic EU commercial-agency indemnity transplanted into PRC law. Compensation depends on the contract, unpaid commission, and any separate labour or unfair-competition claim.

Can one person be both agent and distributor?

Different SKUs or channels sometimes mix models. Keep the invoice path clear; mixed facts are how both sides later rewrite the relationship.

Primary authorities

Reviewed sources support orientation, not a fact-specific assessment.

National laws database (NPC)
PRC Civil Code (gov.cn text)
Supreme People’s Court