PayPal is reasonably safe. If the goods don't arrive, you can usually recover the money through PayPal, as the responsibility for proving delivery lies with the seller. We've found that the best way to handle new suppliers in the far east is to start with a small purchase, see how they handle it, and work up from there.
Don't expect Chinese suppliers to behave in the same way as UK suppliers - different culture, different ways of doing business. Things that might raise a red flag for UK suppliers do not necessarily do so for Chinese suppliers. For example: dirt cheap prices but vastly inflated delivery costs. While this may turn you off local suppliers, there's no reason it should do the same with Chinese sellers.