Due Diligence
China Supplier Verification Checklist
Before wiring money to a Chinese supplier, you need to verify that the company is real, legally operating, and capable of fulfilling your order. This 10-point checklist covers every essential verification step — from validating the business license to screening for litigation and sanctions. Complete these checks before making any payment.
Published March 15, 2025
Why a verification checklist matters
International trade with China involves significant counterparty risk. Language barriers, distance, different legal systems, and limited transparency make it easy for bad actors to operate. According to industry estimates, payment fraud and supplier misrepresentation account for billions of dollars in losses annually for foreign buyers sourcing from China.
A structured verification checklist ensures you do not skip critical steps in the excitement of a promising deal. Each check below can be completed using publicly available Chinese business data, and most can be performed in minutes using a QINCheck company report.
The 10-point verification checklist
Obtain and verify the business license
Ask the supplier for a copy of their business license (营业执照). Every legitimate Chinese company has one. Verify that the license is current, that the company name matches what the supplier told you, and that the format matches the post-2015 standard with an 18-digit USCC. A business license that looks outdated, blurry, or shows the old-format registration number may be forged or expired.
Validate the USCC
The 18-digit Unified Social Credit Code on the business license is the company's primary identifier. Validate the checksum digit to confirm the code is structurally correct, then look it up in SAMR records to confirm it exists and is assigned to the company in question. A mismatched or invalid USCC is an immediate disqualifier.
Confirm the legal representative
The legal representative (法定代表人) is the person authorized to act on behalf of the company. Verify their name matches the person you are negotiating with, or confirm that your contact has proper authorization. Check whether the legal representative appears on any enforcement or dishonest persons lists, which could indicate serious financial or legal problems.
Check registered capital
Registered capital (注册资本) indicates the amount shareholders committed to invest in the company. While registered capital is no longer required to be fully paid upfront in most industries, an unusually low figure (such as RMB 10,000 for a company claiming millions in annual revenue) warrants further questioning. Very high registered capital combined with a recent establishment date may also be a red flag.
Verify business scope matches claims
The business scope (经营范围) on the registration defines what the company is legally permitted to do. A company claiming to manufacture electronics must have manufacturing-related terms in its business scope. If the scope only mentions trading, consulting, or import/export, the company is not a manufacturer — regardless of what their sales team tells you.
Check the establishment date
How long has the company been operating? A company established last month claiming years of experience is misrepresenting itself. While new companies can be legitimate, you should apply extra scrutiny to suppliers with less than two years of operating history, especially if they are requesting large upfront payments.
Review annual report filings
Chinese companies must file annual reports with SAMR. Missing annual reports can result in the company being placed on the abnormal operations list. Check whether the company has filed its most recent annual reports and whether the reported data (revenue, employee count, assets) is consistent with the company's claims.
Search for litigation records
Check Chinese court databases for any lawsuits involving the company. Multiple contract dispute cases, unpaid judgments, or enforcement proceedings are serious warning signs. A company with active litigation may be financially distressed or have a pattern of failing to deliver on commitments.
Screen against sanctions and blacklists
Verify that the company, its legal representative, and its shareholders do not appear on sanctions lists, trade restriction lists, or the Chinese dishonest persons (laolai) list. Doing business with sanctioned entities can expose your organization to legal liability and financial penalties.
Verify the registered address
Check that the company's registered address matches the type of business they claim to operate. A manufacturer should be registered at an industrial zone or factory complex, not a residential apartment or shared office space. Use mapping tools to verify the address exists and corresponds to a real commercial or industrial facility.
What to do if a check fails
Not every failed check is a dealbreaker, but each requires careful evaluation:
- Invalid USCC or no business license: Do not proceed. This is a fundamental requirement for any legitimate business.
- Business scope mismatch: Ask the supplier to explain. They may work through a subsidiary or partner company. Verify the alternative entity.
- Recent establishment date: Not disqualifying on its own, but apply extra scrutiny to payment terms and order quantities.
- Missing annual reports: Check if the company is on the abnormal operations list. If so, reconsider the relationship.
- Active litigation: Review the nature of the cases. A single contract dispute is different from a pattern of fraud claims.
- Sanctions or blacklist hits: Do not proceed until you have consulted legal counsel.
For a deeper understanding of warning signs, read our guide on how to check a Chinese company.
Complete all 10 checks with QINCheck
A single QINCheck report covers all ten verification points on this checklist. Enter a company name or USCC to get SAMR registration data, ownership details, business scope, annual reports, litigation history, and risk indicators — all translated into English and delivered in minutes.