Most importers who lose money in China were not careless. They asked for the business license, they compared three quotes, they checked how many years the supplier had been on the platform. The checks most people run simply do not touch the things that actually go wrong: a trading company posing as a factory, a certificate that belongs to a different company, a bank account that is not the supplier's.
Here is the verification sequence we walk buyers through, ordered by what protects your deposit first.
Step 1: Read the business license before you discuss price
Every legitimate Chinese company has a 营业执照 (yíngyè zhízhào). Ask for a clear scan, not a cropped screenshot. It contains fields you can actually use.
| Field | What it tells you | What to watch for |
|---|---|---|
| Unified Social Credit Code (18 characters) | The company's unique ID | Must match every invoice, contract and bank document |
| Chinese company name | The only legally binding name | English names are not registered; several English names can map to one Chinese company |
| Legal representative | The person legally responsible | Check whether they are linked to other companies |
| Registered capital | Nominal, not paid-in | A high number proves nothing; RMB 1 million is common and often unpaid |
| Business scope (经营范围) | What they are licensed to do | Manufacturing categories should appear if they claim to be a factory |
| Registered address | Where the entity is registered | An office tower with no production site nearby is a yellow flag |
| Establishment date | How long the entity has existed | A two-month-old company with an eight-year-old website deserves questions |
Two things trip up overseas buyers. The business scope is written in regulatory categories, not plain English, so a trader may list sales of machinery with no production category at all. And the registered address is often not the factory address, which is normal in China, but it means you still need to confirm where production actually happens.
Step 2: Check the license in the official registry
The National Enterprise Credit Information Publicity System (gsxt.gov.cn), run by the market regulator, is free and needs the exact Chinese company name or credit code. Look for:
- Operating status: 在营 (active) versus 注销 or 吊销 (deregistered or revoked)
- 经营异常名录, the list of companies with abnormal operations, usually from missed annual reports or an unreachable registered address
- Administrative penalties and court enforcement records
Commercial databases such as Qichacha and Tianyancha pull the same data plus shareholder structure, and some offer partial English interfaces. Their free tiers are enough for a first pass.
A Hong Kong company will not appear in this registry. Hong Kong entities file with the Companies Registry (ICRIS) and usually hold no mainland manufacturing license. That is not automatically a problem, but it changes what you are verifying.
Step 3: Establish whether you are dealing with a factory or a trader
Trading companies are not inherently bad. Plenty are professional, hold stock and manage several factories well. What matters is that you know which one you are buying from, because it changes price, quality control and who answers when something goes wrong.
- Compare the license address with the claimed factory address. If they differ, ask for the plant's own license or its lease.
- Ask for a live video call and have the person walk from the office to the workshop, showing the street sign and building number on the way.
- Ask production questions: machine count, line capacity, who owns the molds, how a tolerance problem is handled, what happens when a batch fails final inspection. Traders answer in general terms; production staff give specifics.
- Ask what their MOQ is based on. Factories tie it to a production run; traders tie it to what they can bundle.
Step 4: Trace every certificate to its issuer
A PDF certificate proves nothing on its own. Certificates are easy to edit and easy to borrow from a sister company.
- ISO 9001: ask for the certificate number and the certification body, then look up the number on that body's website. Check the scope of certification and the expiry date.
- CE: where a directive requires a notified body, the four-digit number next to the CE mark can be checked in the EU NANDO database. A CE certificate issued by a Chinese consultancy is not the same thing as a notified body certificate.
- Test reports (RoHS, REACH, food contact): verify the report number with the lab, and read the sample description and test date. One report covers one tested sample, not an entire product range.
- FDA: for medical devices, establishment registration can be checked in the FDA public database.
Ask for the certificate in the name of the company you are paying. If it sits in another company's name, ask why before you accept it.
Step 5: Audit the factory
An audit is not a tour. A useful one covers the legal entity, premises and lease, equipment list, production lines, headcount, incoming material inspection, in-process QC, final inspection, packing area and sample retention.
If you travel, give short notice rather than a booked date, and check that the name on the gate matches the license. If you cannot travel, third-party inspection firms such as SGS, TÜV, Bureau Veritas or QIMA run factory audits for roughly USD 300 to 800 depending on location and scope. Book and pay for it yourself so the report reaches you unedited.
Step 6: Sample first, then inspect before shipment
- Pay for samples. Free samples often come from a better line than your order will.
- Test the sample against your own specification and record the results with photos.
- Sign off a golden sample, keep it, and reference it in the purchase order.
- Book a pre-shipment inspection before paying the balance. Typical AQL levels are 2.5 for major defects and 4.0 for minor ones, at USD 100 to 300 per inspection day.
The inspection should be commissioned by you, paid by you and reported to you. A supplier who insists on arranging it has removed the point of it.
Step 7: Verify the bank account before you wire anything
This is where the largest losses happen, and it takes ten minutes.
- The account name must match the Chinese company name on the license, character for character.
- No personal accounts, no third-party accounts. If the contract is with a mainland company, the money goes to that mainland company's account.
- Confirm bank details by phone using the number from the license or the registry, not the number in the email signature.
- Treat any email announcing a change of bank details as fraud until a person you already know confirms it by phone.
- For larger orders, use a letter of credit or an escrow service instead of a straight bank transfer.
Common red flags
| Signal | Why it matters |
|---|---|
| License photo with blurred fields or cropped corners | Often hides the credit code or legal representative |
| Invoice company name differs from the bank account name | Classic payment fraud setup |
| Registered address is a virtual office far from the claimed plant | No verifiable production site |
| Price 30-50% below every other quote | Usually different material, smaller specification, or no intention to ship |
| Push for 100% payment upfront, or payment to an individual | Removes your bargaining position and your recourse |
| Certificates that cannot be traced to an issuing body | The document may be real but issued to another company or product |
| Vague answers on production, instant quotes on complex items | Specification was misunderstood, or there is no production at all |
What this costs and how long it takes
A registry check is free and takes twenty minutes. A company profile report from a local agency runs USD 50 to 150. A factory audit is USD 300 to 800, and a pre-shipment inspection USD 100 to 300. The full sequence, done properly, fits inside two to three weeks and costs far less than a deposit on a container.
None of it requires you to read Chinese, but it does require someone to make the phone calls, read the license and stand in the workshop. That is the part Globesino handles for overseas buyers: supplier checks, factory and product inspections, and delivery to your door.