There are ways that are less intrusive, but still somewhat effective. Security is mostly about probabilities. The more circles you remove from the venn diagram, the lower the probability of problems.

So if you remove everyone from China, sure, you remove a lot of fine customers, but you also remove a huge swath of the internet crime rings. Require a US based address. Email the people and have a conversation. Require a phone call.

It's the same as renting out an apartment, If you start renting your apartments to criminals, pretty soon, all you'll have is criminals.