Nine checks worth running before you send the first payment. You can carry out most of them yourself — if you know exactly what to request and what the reply means.
Verifying a Chinese counterparty works differently from what a Kazakhstani or Russian buyer is used to. You cannot phone the bank to ask about their reputation, you cannot visit the production site and back in a day, and the registries are kept in Chinese and run by Chinese rules. Most of the schemes described below are built precisely on that gap.
Below are nine steps in the order it makes sense to go through them. Each step has two parts: what to do and what the result means. We do not offer “universal markers of unreliability” — instead we show which specific answers should stop you, and why.
How to use this material
Eight of the nine steps can be done remotely, without travelling and without speaking Chinese. The ninth — a visit to the production site — requires being there in person. If you are running the check yourself, start with steps 1–3: they filter out most unsuitable counterparties in a single day.
The first document you request is 营业执照, the Chinese legal-entity registration certificate. Every company has one, so by itself it proves nothing. The point is something else: it contains a field called 经营范围 — the list of permitted business activities.
If the counterparty calls itself a factory, this field must contain wording meaning manufacturing — 生产, 制造. If it only shows 批发 (wholesale), 零售 (retail) or 贸易 (trade), you are dealing with a trading company, whatever it may call itself in the correspondence.
Risk signal
They send only a photograph or screenshot of the document and refuse to describe the list of business activities in words. The licence is a public document, and any real manufacturer knows what is written in it. Dodging a direct answer to this question is informative in itself.
A separate case is when the business scope contains both 生产 and trade at the same time. That is not deception: many Chinese factories do sell third-party products alongside their own. But then you need to establish which part of your order is manufactured and which is resold, and clarify that at step 4.
The data in the licence has to be cross-checked against official sources rather than taken on trust. China has several state resources that are free to use without registration. Below are the ones that give a buyer the most practical result.
| Source | What to check |
|---|---|
| 国家企业信用信息公示系统 (gsxt.gov.cn) |
Unified social credit code, date of registration, registered capital, legal address, current status (active / suspended / dissolved), records of violations |
| 信用中国 (creditchina.gov.cn) |
Administrative penalties, inclusion in the register of unreliable counterparties, major violations |
| 中国执行信息公开网 (zxgk.court.gov.cn) |
Outstanding court judgments; companies in this register are restricted in a number of operations |
| 中国裁判文书网 (wenshu.court.gov.cn) |
Litigation history: the nature of the disputes, with whom and on what grounds |
| Commercial aggregators (天眼查, 企查查) |
A summary of all the sources listed above in one place, plus data on investments, branches and headcount |
The first four sources are official, and they are the ones to rely on when making a decision. Commercial aggregators are convenient as a starting point: they gather the data in one window, but they do not replace the primary source, because they update with a delay.
What to look at first is not the absence of records but their content. A company with no litigation history and no penalties is a normal, but not conclusive, sign. More interesting is the following:
The ratio of registered to actual capital
China distinguishes subscribed capital (认缴) from actually paid-in capital (实缴). A company with declared capital of hundreds of thousands of yuan and only a few thousand paid in is often a “paper” structure with no assets.
What it means: in a dispute there is practically nothing to recover from such a company.
Legal address
A manufacturing enterprise is registered at the address where its workshop stands. If the address falls on a residential building, a business centre or a virtual office used for mass registration, there is most likely no production at that address.
What it means: either you are dealing with a trading middleman, or the address was changed after registration.
Date of registration and how often the address changes
A company registered two or three years ago that has changed several addresses since usually has no production site of its own — it moves between rented premises.
What it means: long-term liability for batch quality is unlikely.
A match with companies you already know
A separate scheme is registering a company whose name differs from the real factory’s name by one or two characters. Syntactically similar, legally a different entity.
What it means: someone is trying to point you at a copy of a well-known player.
A Chinese company can be a perfectly legitimate manufacturer and still have no right to export goods on its own. Exporting requires separate registration as a foreign-trade operator (对外贸易经营者备案) and registration with the customs authorities (海关注册登记).
This is checked through 中国海关企业信用信息公示平台 (credit.customs.gov.cn) — the customs registry, which shows whether the company is registered as a participant in foreign economic activity. Beyond the fact of registration, it states the customs trust category: from the highest (高级认证, the equivalent of AEO) down to 失信企业 — an “unreliable enterprise”. The category affects clearance speed and the frequency of inspections.
Risk signal
The counterparty claims to work for export but does not appear in the customs registry, and offers to handle shipment “through a partner”. In practice that means a third party will handle the documents, and responsibility for the batch is diluted between two companies.
The absence of export rights is not a verdict. A factory without that registration does sometimes genuinely work through an export agent. But then you must see that agent in the contract and understand exactly who is responsible for the batch, for the documents and for refunding the money if the goods do not conform.
The most verifiable sign of a factory is not photographs but video of a line in operation. A trading middleman can film a warehouse, an office, product samples and a trade-show stand. He cannot film working equipment in a workshop, because he does not have that equipment.
Ask for video with specific requirements, not “send us a look at your production”. The request must contain three elements: a panorama of the whole workshop, equipment in operation, and a plate showing the machine’s technical specifications. The last one matters: from the make and model you can judge the real capacity of the line and compare it with your order volume.
Risk signal
They send photographs instead of video. The video shows only the finished-goods warehouse or the packing area, but not the process itself. They reply that “production is at another site” and it is impossible to go there now. Any two of these signs together mean a middleman.
An additional question that works well: what is your monthly output of this specific item. Then compare it with what you saw in the video. If the stated capacity far exceeds the visible tooling, the figure came from a presentation rather than from production.
A real factory has a minimum order volume — the MOQ. This is not greed and not a negotiating position, but economics: re-tooling a line for your parameters costs money, and on a batch of ten units it does not pay for itself. So a willingness to take any volume at all is a sign that you are not dealing with a manufacturer.
The working question is not “what is your MOQ”, but this:
Wording of the request
“What is the minimum volume for this item? If we need to change the specification or apply our own marking — what is the minimum volume then, and how will the unit price change?”
The second half matters here. A question about customisation requires the other side to understand the technology: will the MOQ rise, will a new mould be needed, will the production cycle change. A middleman typically answers quickly and confidently — “yes, no problem, the volume will not change” — but there is not a single calculated detail behind that confidence.
Risk signal
The MOQ is abnormally low — they agree to tens of units where the industry norm runs into thousands. Or they answer the customisation question evasively, or quote a surcharge that relates neither to the cost of the mould nor to the length of the changeover.
This is the most reliable of the nine checks, and it requires neither registries nor documents. It is enough to ask a question whose answer is known to someone who genuinely works with the product.
We usually use two questions.
First: which raw material or semi-finished product do you use, and where is it supplied from? A manufacturer names a specific grade, a supplier and, as a rule, the purchase volume. A middleman answers with general words about high quality.
Second: at which stage of production do defects most often occur? This question works better than the first. A production engineer knows the vulnerable operations by heart — precisely because he has dealt with them. Someone who does not make the product has never thought about it, and the question floors him.
Risk signal
The answers come down to “there is no problem with that”, “we will check and get back to you”, “I need to ask the factory”. The last wording is especially telling: if your contact is the factory, he does not need to ask anyone.
If the conversation happens at a trade fair or in a messenger and time is short, short questions about details are useful: how many people work in the workshop, where are the washrooms for the shift, is there an in-house design department. They do not replace document checks, but they instantly separate those who have been on the production floor from those who have not.
One hard rule applies here, and it removes most of the risk: the name of the payment recipient must match the name of the legal entity in the licence character for character. Chinese companies open settlement accounts for a legal entity, not for a trade mark, not for a brand and not for a manager’s name.
So if you are sent details where the recipient is an individual, another company or an offshore structure in Hong Kong, that is not a “technical detail”. It means the payment is going to someone other than the party you are signing the contract with, and in a dispute there will be nobody to recover it from.
Ask for the details as text in the body of an email, not as a screenshot or an attachment, and cross-check them against an independent source: a bank reference, an invoice or the contract. A screenshot is easier to forge than making a payment through someone else’s account.
This is the most common way to lose money in international sourcing, and it has nothing to do with the supplier’s dishonesty. The scheme works like this: an attacker gains access to one party’s mailbox, watches the correspondence for a while, learns the context, and at the moment the discussion reaches payment sends an email with updated bank details.
The email looks natural. It arrives in the same thread, from a similar address — sometimes the mail domain differs by a single character. The wording is neutral: “due to a change in our banking data, please make the payment to the following details”. No pressure, no urgency.
The scheme works not because the victim is inattentive, but because a buyer usually has only one channel of communication with the supplier. There is nowhere to confirm the details: the phone number you have leads to the same person, and he knows nothing about the email.
Protection protocol
First. Record the bank details when the contract is signed and write them into the contract as a mandatory annex.
Second. Any message about a change of bank details means an automatic stop on the payment. No exceptions: even if the email looks completely genuine and you were expecting it.
Third. Confirm only through a channel you initiated yourself, not the one the notification came from. Call the number from the contract, not from the email.
Fourth. Cross-check the new details against at least two independent sources. One confirmation is not enough: if both the messenger and the email are compromised, both channels will give the same false answer.
Risk signals
The sender’s address differs from the previous one by one or two characters. They ask you to send the bank details again, “because the previous email was lost”. The notice of a change of account arrives exactly at the moment payment is being agreed. The details are sent as an attachment or an image — that makes it easier to bypass a text search of the correspondence. They insist on speeding up the payment because of an “exchange-rate change” or an “offer expiring”.
The last question is asked before the order, not before shipment. The wording: “Can we arrange an inspection of the batch before shipment? If the inspection reveals non-conformities — how are they corrected and who bears the cost?”
A supplier confident in his product answers concretely: he sets out the inspection procedure, the timelines, and what happens if defects are found. A supplier with reasons to doubt the batch starts explaining why inspection is difficult.
Risk signals
They refuse an independent inspection, citing the production schedule. The draft contract has no section on what happens if non-conformities are found. The question about costs is answered evasively: “we will sort it out as it comes up”.
A refusal to allow an inspection needs no further interpretation. If a supplier is not prepared to show the batch before receiving full payment, you already know about his product about as much as you would have learned after acceptance — only without the ability to change anything. More on this in “Quality control before shipment”.
A check rarely gives a binary “pass — fail” answer. More often what remains is a set of non-conformities, each of which is individually explainable: the address is registered somewhere other than where the workshop is; the export rights are registered to a partner; the video is from a shoot two years ago. Individually, explainable. Together, they are a description of a trading middleman.
The practical rule we use: if explaining the results of the check requires three or more assumptions, it is not worth working with them. A normal factory needs one or two clarifications, and they are resolved in a single conversation.
And the main thing worth remembering from this piece: all nine checks are carried out before the first payment. Once the money has gone, you lose not only the money but also the ability to choose.
In short
Ask for the licence and the list of business activities. Run the company name through the five registries. Compare registered capital with paid-in capital. Check the customs registration and the trust category. Request video of a line in operation with the machine plate visible. Ask about the most problematic stage of production. Match the payment recipient’s name against the licence. Record the bank details in the contract and stop any payment on notice of a change. Ask about batch inspection before shipment.
Describe the item and send whatever you already have — the licence, a quotation or the correspondence. We will tell you which of the nine steps are already covered, which are worth doing first, and what to watch for in your case. The first review is free, and it commits you to nothing.
