Hongkong
China
A polished Alibaba profile and a price below market are a shop window, not a guarantee. The only thing that shows the real picture is systematic due diligence — done before the money moves.
Why verification isn’t optional
An unvetted counterparty in China exposes you to three distinct failures: a shell company operating under someone else’s registration details, a trader posing as the factory, or a seller who simply vanishes once the deposit clears. By various estimates, more than 40% of companies working with unverified Chinese partners run into problems.
There is also a legal trap that trips up first-timers. Chinese courts and banks rely on registration records, not on how active a company appears to be. If a company lacks the licence for what it’s selling, or the contract is signed by someone without authority, no amount of real-world activity fixes that. In one case, an overseas buyer came within a hair of wiring $160,000 to a “factory” that turned out to have been registered only a couple of months earlier at a mass-registration address.
The three layers of verification
Reliable vetting is sequential: each layer either confirms or overturns the one before it.
Layer 1 — The digital footprint.
On B2B platforms (Alibaba, 1688, Made-in-China), the goal isn’t to pick a supplier — it’s to build a shortlist of 5–7 candidates. Look at account age, specialisation, transaction volume and the Verified Information tab. A Gold Supplier badge signals only a paid membership; on 1688, a rating of three or more “crystals” is the practical benchmark.
Layer 2 — The documents.
Request the business licence (营业执照) carrying the 18-digit Unified Social Credit Code (USCC). The business-scope section reveals the type of partner you’re dealing with: “生产” (manufacturing) points to a factory, while “贸易” (trade) or “进出口” (import/export) points to a trader. One detail matters enormously — changes of shareholders and directors are filed within 30 days, so the licence should be re-checked right before signing, along with the signatory’s authority.
Layer 3 — The physical check.
Documents only give you a hypothesis; reality confirms it. The minimum is a sample order plus a live video call with a walk-through of the premises; beyond that, an independent on-site audit and an AQL inspection of the first batch. An impressive factory in the photos sometimes turns out to be a third party’s floor space, rented for the shoot.
⚠️ Rule of thumb: work with the Chinese legal entity name, never the English branding on the website. The entity on the proforma invoice, the bank account and the licence must all match. Any mismatch is a material risk, not a clerical slip.
Doubts about your supplier’s reliability?
- Verify counterparties in PRC registries
- Spot risks before you sign
- Report with clear recommendations
Where and how to check
The primary source is the government registry SAMR and the public platform NECIPS (the National Enterprise Credit Information Publicity System, gsxt.gov.cn), plus court databases. China’s registries aren’t consolidated into one system, so the data has to be cross-referenced.
| Tool | Access | What it shows |
| NECIPS / GSXT (official) | Open, in Chinese | Registration, status, scope, legal representative |
| Tianyancha | Best from a China IP | Registry, litigation, ownership links |
| Qichacha | Best from a China IP | Detailed analytics, blacklists |
| Aiqicha (Baidu) | Open | Basic registration data |
| Third-party verification report | Paid, English-ready | Consolidated due diligence, analyst notes |
Study lawsuits and enforcement proceedings separately: forced enforcement is often a sign of chronic problems with payment discipline. If the legal representative appears on the blacklist of dishonest judgment debtors (the “Lao Lai” list), treat it as a serious warning.
Factory or middleman?
This is not a formality. A trader owns no production and answers for no defects, and courts routinely dismiss claims against an intermediary. A sprawling, unrelated product range, the absence of “manufacturing” from the business scope, and reluctance to let you onto the factory floor are the classic marks of a reseller. Dealing directly with the maker strips out the markup and pins quality responsibility where it belongs.
Red flags
⚠️ The rule: two or more warning signs is a reason to walk away — not a reason to push harder for a discount.
- refusal to share the business licence, or details that don’t match the registry;
- a price noticeably below market;
- a demand for 100% prepayment and refusal of a 30/70 split;
- payment to a personal account or via WeChat Pay, or grey shipping with no documents;
- recent registration and a mass-registration legal address;
- refusal of a video call or a factory visit.
In parallel, check certificates (ISO, CE, RoHS) and, crucially for HK/international resale, confirm they’re genuine — watch for the “CE” that actually means China Export rather than European Conformity. Confirm the export licence as well.
When to bring in professionals
For a large sum, a complex deal structure, or signs of a politically exposed beneficial owner, enhanced due diligence is warranted. Specialists with access to closed Chinese databases remove the language barrier, run sanctions screening and conduct on-site audits. Re-run the check whenever the contract grows or the ownership changes.
“It’s cheaper to spend a few days on verification than months in arbitration with a supplier who has disappeared. A registration status of ‘active’ means almost nothing on its own — what you look at is the licences, the litigation and the real manufacturer.”
— Sergey Konon, foreign-trade consultant, China counterparty verification
Verify in three layers, cross-reference the registries, and never ignore the red flags. Licence, litigation and the real maker first — the deposit only after. Systematic caution before the deal costs a fraction of any loss that follows it.
Want to deal only with vetted suppliers?
- Full supplier background check
- Protection from fraud and scams
- Fast checks before you pay
FAQ
Build it in layers: first confirm the company genuinely exists via its licence, then match the registration details, assess production capability and business reputation, request samples, and — for meaningful sums — inspect on site. The aim is to tell an operating manufacturer apart from an empty shell.
Every Chinese company has a registration licence with a unique 18-digit code that reveals its status, incorporation date, permitted business scope and capital in the government registries. The name on the licence must match the entity that issues the invoice and holds the bank account.
The baseline: a copy of the business licence, export permits where relevant, bank details in the name of the same legal entity, quality certificates and any regulatory paperwork for controlled goods. If the account holder differs from the company name, stop and investigate.
Signs of a middleman: an overly broad, mixed product range, refusal to show the workshop, and a request to pay a third party. A video walk-through of production, matching the factory address against the licence, and an independent on-site check before a large first shipment resolve the doubt.
The business licence is the core registration document proving a company is legally entitled to operate. You verify it by its Unified Social Credit Code on the open government databases (NECIPS/GSXT) and, for depth, through counterparty-verification services that compile a company’s history and links.
