How to vet a supplier in China and avoid scammers
A checklist for vetting a Chinese supplier: factory vs trader, business licence, export rights, red flags and the bank-detail swap scheme. With a loss case study and FAQ.
Most problems when working with China arise not in production or logistics, but at the very first step — choosing a supplier. That is also where most money is lost. This guide explains how to verify a Chinese company before payment; if you need a qualified shortlist, use our China supplier sourcing service.
How do you check whether a Chinese supplier is a factory or trader?
China has a huge number of trading companies that produce nothing themselves — they buy from factories and resell at a markup. There is nothing criminal in that, but if price and quality control matter, it is better to work directly with the manufacturer.
How to tell them apart:
- Ask about production directly. A real factory will readily show the workshop — photos, video, a video call. A trader dodges specifics.
- Ask to change the item. A factory quotes the surcharge for a non-standard size/material at once; a reseller goes “for approval” for days.
- Check the specialisation. A factory makes a narrow category. A “manufacturer” of furniture, electronics and textiles alike is almost certainly an intermediary.
- Verify the address and account. A registered address in an office district and a Hong Kong account for a “mainland” factory are reasons to be cautious.
Which documents should you request from a supplier in China?
- Business licence (营业执照) with the 18-character unified social credit code — the basic document; the company is verified by it in registries.
- Export rights — otherwise the factory ships through an intermediary.
- Product certificates for your category and import country.
- Bank details in a legal entity matching the licence and contract.
Red flags
If a supplier rushes you to pay, gives a price noticeably below market and asks to transfer to a personal card — that is not a great deal but a classic scam.
| Sign | Why it is dangerous |
|---|---|
| Payment to an individual’s account | No legal link to a company |
| A price well below market | Swap of material, thickness, configuration |
| Pressure and “today only” | Removes time to verify |
| Refusal to show production | Most likely an intermediary |
| A sudden change of bank details | A common sign of email compromise |
| No history, a contradictory profile | High shell-company risk |
The “email interception” scheme
A common scam: scammers gain access to the correspondence and, at the right moment, send an email “from the supplier” with new bank details. The money goes not to the factory. The defence is simple: confirm any change of details through another channel — a video call or a call to a known number, not a reply to the email.
Mini-case: $8,000 on a “great” price
A buyer found a tile supplier 30% below market, paid 100% to an account that “changed” at the last moment to the manager’s personal card. After payment, contact vanished; the company on the licence provided turned out to be registered a month earlier. The deposit could not be recovered. Two checks would have removed the risk: reconciling the details with the licence and confirming the account change through a second channel.
How to secure the deal
- Work under a contract with a specification and liability for defects.
- Use staged payment: a deposit to start, the balance after inspection.
- For a first order, order a sample and run a pre-shipment inspection.
- For large and critical orders — a factory audit on site.
Checklist before the first payment
- Is this a factory or a trader? Confirmed by workshop video?
- Are there a business licence (18-digit code) and export rights?
- Are the details for a legal entity matching the licence and contract?
- Is the price reasonable for the market (not “too good”)?
- Is there a contract with a specification and AQL?
- Is payment staged with a pre-shipment inspection?
If even one point is open — do not rush to pay. Don’t want to check yourself — that is part of a sourcing agent’s job.
Don’t want to vet suppliers yourself? We find and verify factories, sign the contract and control quality at the production site — you work with a vetted manufacturer without the risks. A free consultation.
Frequently asked questions
How do you tell a factory from a reseller in China?
A real factory will show production (photos, video, a video call from the floor), will make a size/material change to order and quote the surcharge at once, and has a narrow specialisation. A reseller goes "for approval" for days and offers "everything at once" — furniture, tile and electronics alike.
Which documents should you request from a Chinese supplier?
The business licence (营业执照) with the 18-character unified social credit code, export rights, product certificates for your category and country, and bank details in a legal entity matching the licence and contract.
Can you pay to a supplier's personal account?
No. Payment to an individual's account, or to a Hong Kong company for a "mainland" factory, are classic signs of fraud. Pay only to the company account matching the name in the contract and business licence.
What if the supplier sends new bank details?
Confirm the change of details through another channel — a video call or a call to a known number, not a reply to the email. This protects against the "email interception" scheme, where scammers swap the details in the correspondence.
How do you check a Chinese company online?
By the unified credit code you can verify the company in state registries and B2B profiles: registration date, registered capital, line of business. A new company with no history and a contradictory profile is a reason for caution.
What is a factory audit and when is it needed?
It is an independent inspector's visit to the production site: checking real capacity, equipment, the quality system and conditions. Justified for large orders, new suppliers and critical items where the cost of error is high.