How to Verify a Chinese Supplier: A 7-Point Checklist Before You Pay

Every year, importers wire deposits to Chinese suppliers that look completely legitimate — a professional website, a full product catalogue, quick replies, maybe a certificate or two. Then the goods never ship. Or they ship wrong. Or the “factory” turns out to be a middleman who stopped answering the moment the money landed.

Most of those losses were preventable. Not with luck — with a repeatable verification process run before money leaves your account.

This is the checklist we run when we verify suppliers for buyers. It isn’t theory: these are the seven checks that actually catch problems.

Why you verify before paying, not after

Once a deposit reaches a supplier in China, your leverage drops sharply. Recovery means cross-border litigation in a Chinese court, in Chinese, against a company that may have no assets. The cost of chasing a $5,000 deposit usually exceeds the deposit itself.

That asymmetry is the whole point: verification is cheap, recovery is expensive. Spend an afternoon on the front end, not a year on the back end.

Every legally registered Chinese company holds a business license (营业执照) carrying an 18-digit Unified Social Credit Code (统一社会信用代码). That code is the supplier’s real identity — registration number and tax ID combined.

Two things to check:

Does the code resolve to the company you think you’re dealing with? Not the trading name, not the logo on the catalogue — the legal entity name on the license.
Does that legal entity match the bank account name? This is where a huge share of fraud gets caught. If your invoice says “Ningbo Sunrise Industrial Co., Ltd.” and the bank details name a different company — or a person — stop. Legitimate suppliers invoice and get paid under the same legal entity.

Chinese company registration can be looked up on the National Enterprise Credit Information Publicity System (gsxt.gov.cn). It’s free, and it’s official.

2. Check the business scope

The license lists a business scope (经营范围) — the activities the company is registered to perform. Scan it for categories relevant to your order:

Words like 生产 (production) or 制造 (manufacture) for a maker
Words like 销售 (sales), 贸易 (trade) or 进出口 (import/export) for a trader

A supplier claiming to manufacture injection-moulded parts, whose scope only covers “hardware sales,” is probably not the manufacturer. That isn’t automatically disqualifying — but it changes both your price expectations and your risk profile.

Worth knowing: the scope is self-declared at registration and loosely enforced. A “production” line is necessary but not sufficient. Keep going through the checklist.

3. Is it a factory or a trading company?

This is the most common misunderstanding importers have. Many suppliers present themselves as factories but are trading companies — meaning you pay a margin on top of the real factory’s price, with less visibility into production.

Signals of a trading company:

An office tower address, not an industrial zone. Chinese industrial parks are unmistakable: gates, loading bays, dormitories, workshop buildings.
An impossibly broad product line — garden tools and LED lighting and kitchenware. Real factories are usually narrow.
No production staff numbers, no equipment list, or vague answers when you ask about capacity, machinery or lines.
Certificates that don’t match what a manufacturer of your product would plausibly hold.

A fair caveat: trading companies are not automatically bad. Good ones consolidate categories, take small orders a factory won’t touch, and handle QC and logistics competently. The question isn’t “factory or trader” — it’s “do the price and the service reflect what they actually are?”

The problem is believing you’re buying from a factory, when you’re actually paying a factory price plus a margin for less control.

4. Check the China-side public records

China publishes an unusual amount of company data publicly. Three free sources worth checking:

gsxt.gov.cn — registration status, administrative penalties, “abnormal operations” flags.
zxgk.court.gov.cn (China Enforcement Information Disclosure Network) — the list of judgment debtors who failed to comply with court orders (失信被执行人). A supplier on this list is a hard stop.
wenshu.court.gov.cn (China Judgments Online) — court decisions. A pattern of contract disputes is worth knowing about.

You’re not running full legal due diligence. You’re looking for obvious red flags: a deregistered company, enforcement records, repeated judgments for non-delivery.

5. Audit the factory — or at least do a real video walkthrough

If the order justifies it, a physical third-party audit is the strongest signal available. A proper audit checks:

Production equipment and capacity — does the machinery match the product?
Workforce and lines — are there enough people to actually build your order?
Quality control — incoming material checks, in-line checks, final inspection
Raw material and finished-goods inventory — does it look like a working factory?
Safety and compliance conditions

If a full audit is disproportionate to the order, ask for a live video walkthrough — not a recorded video. Live, on a call, while you ask questions. A recorded “factory tour” can be filmed at someone else’s factory. A live call where you ask them to walk into the workshop, show the machines running, and open a random box of components is far harder to fake.

Red flag: a supplier who refuses a live walkthrough, or keeps rescheduling it. The refusal is information.

6. Compare samples to mass production

A supplier’s sample is the best version of their work. The question is whether mass production matches it.

Protect yourself with documented sample approval:

Approve a physical sample and keep it, with both sides acknowledging it in writing — photos, dimensions, materials, tolerances.
For larger orders, require a pre-production sample made on the actual production line. That’s the version most likely to reveal problems.
Consider a mid-production inspection on larger runs, before goods are packed. Fixing an issue mid-run costs far less than after shipment.

7. Set a safe payment structure

How you pay determines how much risk you carry. Roughly, from safer to riskier:

Letter of credit (L/C) — bank-mediated, strong protection, heavy on paperwork and cost. Usually worth it for large orders.
Staged T/T — commonly 30% deposit, 70% against a copy of the bill of lading. Standard for many exporters, but note the balance is due before you can inspect the goods, so pair it with an inspection.
Escrow-style payment or trade assurance platforms — an intermediary holds funds until conditions are met.
100% upfront by T/T — avoid. If a supplier insists, that insistence tells you something.
Western Union, or payment to a personal account — hard stops. There is no legitimate reason for a real company to receive a business payment this way.

The most important rule: the bank account name must match the legal company name on the contract and the invoice. “Updated bank details” emails are the classic business email compromise scam — an attacker intercepts your thread and sends new account details just before payment. Always verify any account change through a second channel: a phone call to a number you already had.

The fastest version of this checklist

If you only do three things:

Match the legal entity across the license, the contract and the bank account.
Look the company up on gsxt.gov.cn and zxgk.court.gov.cn.
Take a live video walkthrough and ask questions they can’t prepare for.

Those three catch a large share of serious problems.

When it makes sense to have someone do it for you

Verification isn’t complicated, but it is detail work — in Chinese, across several official systems, sometimes involving a physical visit to an industrial zone hundreds of kilometres away.

If you place small orders occasionally, the checklist above is probably enough. If you source repeatedly, place larger orders, or don’t read Chinese, having someone on the ground in China do it is usually cheaper than the mistake it prevents.

That’s the work we do. We’re paid by the buyer, not by the factories — so our incentive is to tell you when a supplier looks wrong.