China offers an enormous range of suppliers — from world-class factories to small workshops and outright scammers. Most problems importers face — poor quality, late delivery, lost deposits — can be prevented by vetting suppliers properly before paying. Here is a practical process.
Step 1: Verify the Business Licence
Every legitimate Chinese company has a business licence with a Unified Social Credit Code. Ask for a copy and verify it through China's official enterprise credit information system or a verification service. Check:
- Company name — does it match the name on invoices and bank details?
- Registered capital and date of establishment
- Business scope — does it include manufacturing your product?
- Legal representative
- Registered address
Step 2: Factory or Trading Company?
Many suppliers presenting themselves as factories are actually trading companies. Trading companies are not necessarily bad — they can offer range, English-speaking staff, and consolidation — but you should know who you are dealing with.
Signs of a trading company:
- Business scope includes trading or import-export rather than manufacturing
- Very wide product range across unrelated categories
- Reluctance to allow factory visits or video calls from the production floor
See sourcing agent vs direct factory.
Step 3: Check Their Track Record
- How long have they been in business?
- Which markets do they export to?
- Can they provide references from customers — ideally in your region?
- Do they hold relevant certifications, such as ISO 9001, or product certifications for your market? Verify certificate numbers with the issuing body.
Step 4: Video Call or Visit
A live video tour of the factory — showing production lines, the warehouse, and quality control — reveals a lot. Ask to see your specific product being made. If possible, visit in person, or have a trusted agent or inspection company conduct a factory audit.
Step 5: Factory Audit
Third-party inspection companies offer factory audits covering legal status, production capacity, equipment, quality systems, and sometimes social compliance. For significant orders, the cost is small compared with the risk.
💡 Bank details must match the company
Pay only to a corporate bank account in the name of the company you contracted with. Requests to pay a personal account or a different company's account are a major warning sign — and a common scam pattern.
Step 6: Order Samples
Order samples before committing to production. Evaluate quality, materials, and finish. Keep a sealed approved sample as the reference for the bulk order.
Step 7: Start Small
Place a smaller trial order first. Observe communication, quality, and punctuality before scaling up.
Step 8: Protect Your Payment
- Use secure payment methods — for example a letter of credit, or a deposit with balance after inspection
- Avoid paying 100% upfront to new suppliers
- Link balance payments to passing a pre-shipment inspection
- Verify bank details by phone if they ever change
Red Flags
- Prices far below the market
- Pressure to pay quickly or offers that "expire today"
- Refusal of video calls, audits, or inspections
- Payment to personal accounts or unrelated companies
- Business licence details that don't match
- Poor or inconsistent answers to technical questions
- Changed bank details mid-transaction — see avoiding export payment fraud for how this scam works
Keep Records
Keep written contracts, specifications, sample approvals, and correspondence. If something goes wrong, clear documentation is essential for any claim.
Frequently Asked Questions
How can I check if a Chinese company is real?
Ask for the business licence and verify the Unified Social Credit Code and details through China's official enterprise information system or a verification service. Compare company names across the licence, invoices, and bank details.
Is it bad to buy from a trading company in China?
Not necessarily. Trading companies can offer broader ranges and better communication, but you should know you are dealing with one and understand where products are actually made.
How much deposit should I pay a Chinese supplier?
Deposits of around 30% with the balance after inspection or against documents are common. Avoid paying 100% upfront to new suppliers.
Sourcing From Abroad?
Hexaco Global helps businesses vet suppliers, negotiate terms, and manage documentation so imports arrive as ordered. Tell us what you need — we reply within 24 hours.
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