If you are feeling uneasy about the transaction then I would advise that you do as has already been suggested and cancel the sale, citing "Problem With Buyer's Address" as the reason why.
Once you have done that, in order to avoid a recurrence of the problem if you decide to relist the item, add the buyer's User ID to your Blocked Bidders List so that he/she cannot purchase anything else from you in the future. If you also activate the "Don't Allow Blocked Buyers To Contact Me" option in your Seller Preferences (if you have not already done this previously) then the buyer will not be able to contact you again. However, given that you have recently been in a transaction with this buyer the blocks will take a bit longer to kick in than they would have done had you never sold anything to this buyer, but once they do kick in the buyer will be unable to contact you.
Finally, if you do not wish to sell items to buyers in China - or for any other country, for that matter - go back into your Selling Preferences page and click on the Postage Preferences link. Although I gave up selling on eBay some years back, I have done my best to remember what I used to do when I wanted to block certain international destinations. If I remember correctly the procedure is as follows, although eBay may well have changed things since I last sold on eBay, in which case some of the following information may be inaccurate to some extent by now.
Once you have clicked on the Postage Preferences link a Manage Postal Settings page should appear on the screen. Scroll right down to the bottom of the page and on the left hand side of the screen you should see a line that reads "Exclude Postage Locations" with the options "Domestic" and "International" in the centre. Click on the Edit link to the right of that page and it will take you to a new page where you can change the settings with regards to which countries you do and do not wish to post to.
To block buyers in certain overseas destinations look at the lower half of the page, which is entitled "International." You will see a list of all of the different regions of the world - look at each option in turn. If you want to block every country from that continent then just click on the main box next to the name of the continent in question and every single country in that region will be blocked from being able to purchase anything from you. If, however, you don't mind posting to some of the countries on that continent but specifically want to block others then click on the link that says "Show All Countries." Put a tick next to all of the countries that you want to block and leave the boxes blank next to any countries that you don't mind posting to. Repeat the process for each continent until you've finished making the necessary updates.
Once you have finished doing this scroll right down to the bottom of the page and tick the box in the bottom left hand corner next to the sentence that reads "Also Apply To Current Listings" and then click on the blue "Save" button. As soon as you have done this anybody who lives in any of the countries and/or continents that you have put a block on will be unable to purchase anything from you.
