Yes, always buy the seller, not the product
Bit of a shame as I know there are lots of genuine ebay sellers in China... hopefully as the internet becomes dominant over there, they'll be doing some self-policing.
I know some have issues with paypal...but you rarely get someone with criminal intent using it. In general, if they don't accept paypal, I'll pass it by. It's not easy to create more than one paypal account, where-as its very easy to create a new ebay account.