Before wiring money to a Chinese supplier, most foreign buyers check far too little. This guide explains, step by step, how to verify a Chinese supplier’s legal identity, business reality, and credit record using public and lawful channels, so that you pay based on facts rather than a polished website and a friendly sales contact.
If you buy goods from China, the most useful habit you can build is simple: verify the supplier before you pay, not after.
In the cases I handle as a Chinese lawyer, foreign buyers rarely lose money because they negotiated the wrong price. They lose it because they treated a good-looking website, a smooth WhatsApp chat, and one qualified sample as proof that the supplier was real and able to ship. None of those things prove that.
What most foreign buyers don’t realize is how much of a Chinese company’s legal and credit history is sitting in public databases, free to read if you know where to look. A Chinese lawyer can usually form a reliable view of a supplier in an afternoon, well before any deposit leaves your account.
Here is what to check, and roughly in what order.
Why This Matters
The suppliers who defraud or string along their customers tend to pick foreign buyers over domestic ones. It comes down to information asymmetry.
A Chinese buyer, or a lawyer the buyer hires, can pull up a counterparty’s registration, shareholders, court cases, and enforcement records in minutes. A foreign buyer usually can’t read those systems, often doesn’t know they exist, and has no easy way to tell a real factory from a trading company using somebody else’s factory photos. High-risk suppliers know this, and they price that blind spot into how they operate. Pre-payment verification is simply about removing the blind spot.
Step 1: Confirm the Legal Identity
Start with the most basic question. In legal terms, who are you actually dealing with?
An English brand name, a website, and an email signature are not the legal identity of a Chinese company. The legal identity is the Chinese full legal name plus the Unified Social Credit Code (统一社会信用代码), an 18-character code that uniquely identifies the registered entity.
Ask the supplier for its full Chinese legal name (not just the English trade name), a copy of the business license showing that code, and the name of the legal representative.
Then check those details against the official record instead of trusting the documents themselves. Business licenses get edited, reused, or borrowed from a related company all the time. The free government source is the National Enterprise Credit Information Publicity System (国家企业信用信息公示系统); commercial tools like Qichacha (企查查) and Tianyancha (天眼查) are faster to use and pull from the same underlying data.
You want to confirm that:
- the Chinese name and the code match a company that really is registered;
- the status reads 存续 or 在业 (active), not revoked, deregistered, or flagged as abnormal;
- the registered business scope actually covers your product and the import/export activity;
- the company’s age and registered capital are roughly consistent with how it presents itself.
A brand-new or very small company claiming decades of experience, huge capacity, and warehouses full of stock is the first thing that should make you slow down.
Step 2: Check the People
Plenty of buyers verify the company and stop there. In China, the legal representative, the shareholders, and the actual controller often tell you more about real risk than the company page ever will.
You can search most of this through the same public channels, plus the Supreme Court’s enforcement and judgment-defaulter sites (中国执行信息公开网). What you’re looking for:
- whether the legal representative is on the dishonest-debtor blacklist (失信被执行人);
- whether that person is subject to consumption restrictions (限制高消费), which usually signals unpaid judgments;
- how many enforcement cases are attached to them;
- whether there are earlier sale-of-goods disputes, especially with foreign buyers;
- whether the same person keeps opening, closing, and transferring companies, which is the pattern you see with rotating shell entities;
- whether related companies under the same control show the same kind of trade disputes.
If the legal representative is already a dishonest debtor, or the related companies show a string of foreign-trade disputes, that is close to a deal-breaker. At the very least, don’t agree to a large advance payment with nothing securing it.
Step 3: Test The Business Real or NOT
A company can be perfectly registered and still have no factory, no stock, no staff, and no real ability to perform. Registration tells you the entity exists. It says nothing about whether it can do the job.
A few ways to test it:
- Make the addresses line up. Compare the registered address against what’s on the website, the email signature, the certificates, and the inspection documents. Several addresses that don’t match, or a “factory” that turns out to be a residential flat, a shopfront, or a virtual office, is a warning sign worth taking seriously.
- Ask for a live video walkthrough, not a recorded clip. A genuine supplier can usually walk you through the line, the warehouse, and the office on a live call, and hold up today’s date, the order number, and your company name on a piece of paper.
- Confirm the factory is theirs. Borrowed and stock factory photos are everywhere. If the supplier is really a trading company, fine, but it should say so and show you an authorization or a supply confirmation from the actual maker.
- For a large order, pay for a third-party audit. SGS, BV, CCIC, TÜV, or a local investigator will go and look so you don’t have to take the seller’s word for it.
When a company calls itself a “manufacturer” but stalls, makes excuses, or only ever sends old videos the moment you ask for a live look, treat that as the answer.
Step 4: Verify the Contact Person’s Identity and Authority
In most cross-border deals, the whole transaction runs through one person on WhatsApp, WeChat, or email, usually under an English nickname.
That person is not automatically authorized to bind the company, quote prices, sign the contract, or tell you where to send the money, no matter how official the email address looks.
For any order that matters, ask for the contact’s real Chinese name and position, a business card and company email, and a company-stamped authorization confirming they can negotiate, sign, and issue payment instructions on the company’s behalf. Then cross-check the person through the company’s official phone or email, and on a larger deal, get the legal representative or another officer on a video call.
I’ll give you a real example of why this matters. In a case I’m handling now, the “sales manager” who ran the entire deal had a profile photo that looked AI-generated, and no one ever confirmed the person’s real name. The buyer found that out only after the money was gone.
Step 5: Match the Receiving Account to the Contract Party
Before you send anything, make sure the receiving bank account belongs to the company named in the contract. The same legal entity, not a related one.
Be careful when you’re asked to pay an individual’s personal account, a third party’s company account, or a Hong Kong account when your contract is with a mainland company. Be most careful of all when the account changes partway through the deal.
A mid-transaction account switch is one of the oldest tricks in foreign trade. Sometimes it’s an outside fraudster who has hacked the email thread; sometimes it’s the supplier moving money out of reach. Either way, the rule is the same: any account change has to come on a stamped company document and be confirmed by phone on a number you already had. A message in the chat is not confirmation.
Step 6: Sanity-Check the Price
A low price isn’t illegal, but it’s a common lure in fraud and bad-faith breach.
Get quotes from two or three other suppliers for the same product over the same period. On a CIF quote, work out whether the number could even cover the goods, the freight, the insurance, and the export costs; if it can’t, ask the supplier to explain how. And get someone with industry knowledge, a sourcing agent or a freight forwarder, to look at it. A lawyer won’t always know the going rate for steel or injection-molded parts.
A price well under market, paired with pressure to “lock it in” by paying today, is a combination I see again and again in the cases that go wrong.
A Minimum Pre-Payment Checklist
Before paying a deposit, balance, or large advance to a Chinese supplier, confirm at least:
- Chinese full legal name, business license, and Unified Social Credit Code;
- active registration status and a business scope that fits the deal;
- litigation, enforcement, and dishonesty records for the company, the legal representative, the shareholders, and related companies;
- that the registered, office, factory, and warehouse addresses are consistent;
- the real identity, position, and stamped authority of the contact person;
- that the receiving account belongs to the contract party, with no individual or third-party accounts;
- that the price isn’t far below market without a credible explanation;
- a live factory video, or a third-party audit on larger orders.
If you can’t tick several of these, slow the deal down and keep your money where it is.
When to Bring in a Chinese Lawyer
On a small first order, you can probably handle most of this yourself. On a first-time supplier, a large order, or any deal where the other side wants a big advance, it’s usually worth having a Chinese lawyer check the supplier before you pay.
That’s the work I do for foreign buyers: registration and status, the credit and litigation history of the legal representative and shareholders, related-company risk, whether the addresses and identities hold together, and whether the receiving account actually matches the contract party. The point is to make sure each payment rests on something you can verify and, if it ever comes to that, something you can enforce.
If you’re about to pay a Chinese supplier and want it checked first, feel free to get in touch for a China Supplier Legal Check.
This article is for general information only and does not constitute legal advice. It does not guarantee the reliability of any supplier, the completeness of any information, the acceptance of any criminal report, or the recovery of funds. For advice on the law of your own country, consult a locally qualified lawyer.