In short
Before a large order, check three things: that the company legally exists and really makes what it sells you, that it has no lawsuits or debts that put your order at risk, and that the factory has the capacity and quality control it claims. The first two can be checked remotely in the Chinese registers; the third needs a visit. At Asiaction, these checks range from $99 (company check-up) to $595 per day for an on-site audit.
Why verify a Chinese supplier before you order
On a multi-container order, the deposit paid to the factory is often 30 to 50% of the total. That is when you are most exposed: if the company is not what it claims, subcontracts without telling you or is already in trouble, the deposit is lost or the order arrives late and off-spec.
The problems we see most are not ghost factories but trading companies posing as manufacturers, factories that subcontract part of the work, bank accounts that do not match the company, and copied or expired certificates (ISO, CE).
Step 1: check that the company legally exists (remotely)
Every Chinese company has a business licence (营业执照) and an 18-character unified social credit code. Ask for a copy of the licence, then check it in China’s National Enterprise Credit Information Publicity System (gsxt.gov.cn). Compare:
- The exact name in Chinese and the code: they must match the contract and the proforma invoice.
- Date of incorporation and capital: a company created a few months ago that claims “20 years of experience” is a warning sign.
- Business scope (经营范围): if it covers trading only and not manufacturing, you are dealing with a trading company.
- Legal representative and shareholders: useful to spot related companies and recent changes.
- Registered address: a downtown office address for a “factory” needs a closer look.
Step 2: check lawsuits and financial health
Chinese court decisions are published (China Judgements Online) and defaulting debtors appear on a national blacklist (失信被执行人). A factory facing several cases for unpaid debts or failed deliveries is a risk for your deposit. Also check administrative penalties and abnormal-operation flags in the register.
Then check the bank account: payment must always go to a company account in the exact name of the company signing the contract, never to a personal account or to another “partner” company. A change of bank details during an order is the most common fraud scenario.
Step 3: check documents, certificates and references
- Certificates (ISO 9001, CE, lab tests): check the number with the issuing body and the expiry date. For CE marking, see our EU compliance guide.
- Export licence and export history to your market.
- Customer references: ask for customers in your country and call them.
- Factory photos and videos: ask for a live video of the workshop rather than catalogue photos.
Step 4: the on-site audit, before large orders
Registers tell you whether the company exists; only a visit tells you whether the factory can make your order. An auditor on site checks:
- that the factory and production activity are real (not a showroom);
- capacity: lines, machines, staff, realistic lead times for your quantities;
- subcontracting: which steps are done elsewhere;
- internal quality control: incoming, in-process and end-of-line checks;
- storage and packing conditions, and work in progress for other customers.
You receive a report with photos, observations and recommendations. See a sample Asiaction factory audit report (PDF).
Which level of verification to choose
| Asiaction service | What is checked | Price | When to use it |
|---|---|---|---|
| Company check-up | Legal registration, licence, owner, capital, legal and financial situation from the official Chinese registers | $99 | First filter, before you even ask for samples |
| Company investigation | Everything in the check-up, plus a discussion with the company representative and checks of certificates, export licences, factory photos, references, bank details and organisation | $349 | Before the first deposit, or when an existing supplier changes entity or bank account |
| On-site audit | Factory visit: production, capacity, quality control, subcontracting; report with photos and recommendations | $595 per day | Before a large order or a new custom-made product |
Our fee is paid by you, never by the factory, so we have no interest in approving a supplier that is not right for you. We defend your interests, not the factory’s.
The most common warning signs
- a price far below every other quote;
- refusal of a visit or a live video of the workshop;
- a request for 100% payment before production;
- a bank account in the name of another company or a person;
- certificate numbers the issuing body cannot find;
- a contact who cannot answer technical questions about production.
Two real cases show what these checks prevent: a melamine plywood scam and a fraud avoided on metal fasteners.
After verification: secure the order
A verified supplier does not replace a secure order: approved samples kept as reference, a contract with specifications, penalties and acceptance criteria, a 30-50% deposit and the balance paid only after a pre-shipment inspection. Our sourcing in China guide explains how we shortlist 3 to 5 factories per product.
FAQ
Can I verify a Chinese supplier myself?
Yes, for a first check: ask for the business licence and look up the unified social credit code in the public Chinese register. But the registers are in Chinese, company names look alike, and a visit is still needed to judge real capacity. For a large order, a check-up or investigation by a team on the ground greatly reduces the risk.
How do I know if it is a factory or a trading company?
Look at the business scope on the licence: a factory lists the manufacture of the products concerned. A trading company is not necessarily a problem, but you need to know who really makes your goods, and the price then includes its margin.
How much does a factory audit in China cost?
At Asiaction, an on-site audit costs $595 per day anywhere in China. A remote company check-up costs $99 and a company investigation $349.
Should my current supplier be verified too?
If you have worked with it for a long time without problems, a legal check is often enough. It is essential if it changes name, company, bank account or address, or if you increase your volumes significantly.
How long does a verification take?
A company check-up usually takes a few days. An on-site audit is scheduled according to the factory’s location; plan it before the first deposit.
Have your supplier checked before the first deposit
Send us the company name, its licence if you have it, and your order project. Our team in Guangzhou will tell you which level of verification is useful and send you a report in English or French.
