If you entered into your contract in Australia, then you may be able to sue them through the Australian courts, but it will depend on a specific analysis of the exact circumstances in which you entered into your contract. The effectiveness of such action will also depend on whether this person has assets in Australia, or whether the person is likely to return to Australia at some point.
Alternately, you can try to sue them in China, but you will need to engage a Chinese lawyer to explore your legal options in that regard, as only a Chinese lawyer will be able to advise you on the laws applicable in China. No doubt your prospects of recovering will also depend on the circumstances of your supplier. The supplier may have simply run off with your money, or may have gone broke for reasons beyond his control (especially noting recent issues with the Chinese sharemarket), until that is ascertained, it will be difficult for even a Chinese lawyer to be able to be sure you have good prospects of recovering.
For future reference, when dealing with foreign suppliers in large transactions, consider consulting with your bank so that you can arrange for payments to be made to a third party escrow account instead of directly to the foreign supplier. Arrangements of this sort work such that you pay the money to the bank, which only releases the money to the supplier once the goods have been delivered.
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