How to verify a Chinese factory before you pay: the four-tier checklist

VerificationHow to verify a Chinese factory before you pay: the four-tier checklistArkadii VakhnovskyiMay 6, 2026 · 19 min read · Updated September 21, 2026Quick answerTo verify a Chinese factory before paying, work in four tiers: free desk checks (business licence on gsxt.gov.cn, scope, capital, export history, bank account name), document checks against issuer databases, an on-site audit of the production floor, and a pre-shipment inspection to ISO 2859-1 before the balance. Each tier proves something the previous one cannot.This checklist is for importers ordering from a Chinese supplier they have not bought from before: steel and metal, solar and battery storage, equipment, private label. It is the working list, not the theory. Where a sub-topic needs a full article, we summarise the check and link to the deeper guide. For how we run verification as a company, see our factory verification protocol.Verification runs in four tiers, cheapest firstThe order matters. Desk checks cost nothing and eliminate most bad candidates in an afternoon. Document checks take a few days. An on-site audit costs travel and a working day, so you spend it only on the one or two suppliers who survived the first two tiers. Pre-shipment inspection comes last and protects the balance payment. Skipping a tier moves the risk to a stage where it costs more to fix.What each verification stage proves, and what it cannotStageWhat it provesWhenRough effortWhat it cannot proveDesk checkThe legal entity exists, is active, may legally make and sell your product, and is the entity you will payBefore the first RFQ reply is taken seriously2–6 hours per supplier, freeThat the company owns a factory or can make your specDocument checkCertificates, test reports and mill certificates are genuine and belong to this manufacturer and this productBefore the deposit1–5 working days, mostly waiting for issuersThat current production matches the tested sampleFactory auditProduction lines, equipment, raw material, QC and headcount are real and match the claimed capacityBefore the deposit on a first order or a large order1 day on site plus travel; report in 1–3 daysThat your specific batch will be made to specPre-shipment inspectionThe finished, packed goods meet the spec within an agreed AQLAt 80–100% production, before the balance1–2 inspector-days per SKU groupLatent defects that only show in use or lab testingTier 1: desk checks cost nothing and remove most bad candidatesBusiness licence and Unified Social Credit Code on gsxt.gov.cnAsk for a scan of the business licence (营业执照) and read off the 18-character Unified Social Credit Code (统一社会信用代码). Search it on the National Enterprise Credit Information Publicity System run under the State Administration for Market Regulation. The registry record must match the scan: Chinese legal name, legal representative, registered address, date of establishment and status. Active is 存续 or 在业; 吊销 (revoked) and 注销 (deregistered) end the conversation. Also check whether the company sits on the list of abnormal operations (经营异常名录) or has administrative penalties. The site is in Chinese and parts of it can be awkward to use from outside China; that is an inconvenience, not a reason to skip it.Scope of business must include manufacturing your productThe scope (经营范围) lists what the company may legally do. A manufacturer's scope contains production wording, such as 生产 or 制造, followed by the product family. A trading company's scope says 销售 (sales), 批发 (wholesale) or 进出口 (import and export) and nothing about producing. A scope that covers electronics, garments, steel and cosmetics at once is a trading company, whatever the website says. A trading scope is not automatically disqualifying, but it means you are not talking to the factory, and you should price and plan accordingly.Registered capital and company ageRegistered capital is the amount shareholders have subscribed, not cash in the bank. Until mid-2024 there was no deadline to pay it in, so large round numbers meant little. China's revised Company Law, in force since 1 July 2024, requires shareholders of a limited liability company to pay in subscribed capital within five years of formation, with a transition period for older companies. Use capital as a proportion check: a company with a few hundred thousand yuan of capital, registered 14 months ago, offering you a 1,000-tonne steel contract or a turnkey production line is out of its weight class. Paid-in capital, where the company discloses it in its annual report, is more telling than the subscribed figure.Export recordsA factory that claims to export to your region should be able to show it. Ask for two or three recent export customs declarations (报关单) or bills of lading with prices and buyer names blacked out; the shipper name and the HS code should match the company and your product. Commercial trade-data services built on bills of lading can show whether the company appears as a shipper at all. No export history is not fatal for a genuine domestic manufacturer, but then someone else will be the exporter of record, and you need to know who.Factory or trading company: the desk-level tellsThe registered address is an office tower floor, while the “factory” photos show an industrial park in another city.The product range on the website spans unrelated categories, each with a different photo style.The company name contains 贸易 (trading), 进出口 (import-export) or 科技 (technology) rather than an industry word such as 钢铁, 光伏 or 机械.Factory photos appear on other suppliers’ listings; a reverse image search takes two minutes.The seller refuses to name the plant’s legal entity or give its address for a visit.None of these alone proves anything; three or more together usually do. Our guide on how to tell a factory from a trader goes through the tells in detail. If the pattern looks like fraud rather than a middleman, stop before any payment, not after.Bank account name must match the contract partyThe beneficiary name on the proforma invoice must be the legal entity that signs the contract and appears on the licence. Payment to a personal account, to a different Chinese company, or to a Hong Kong or offshore entity nobody mentioned before is the single most common way buyers lose deposits. There is a legitimate exception: some groups invoice exports through an affiliated trading or Hong Kong company. That is acceptable only when the affiliate is named in the contract as the seller, and the relationship is documented before you pay, not explained after a change of bank details arrives by email.A showroom is not a factory: what the solar case showedIn our solar panels for Poland case, the buyer needed a full 40-foot container of modules. The supplier presented itself as the manufacturer, with a polished catalogue and factory imagery. Verification showed it was a trading company. We traced the actual manufacturer before any money moved, so the client could contract with the plant that makes the modules. The point is not that traders are dishonest; it is that a buyer who thinks he is paying a factory is also relying on the factory’s certificates, warranty and capacity, and none of those belong to the trader.The automated module hall of a solar manufacturer our team visited while tracing the real plant behind a trader for a Poland order.Tier 2: documents are only as good as the database behind themA PDF proves nothing on its own. Every certificate worth having is issued by a body that keeps a register, and every test report comes from a lab that will confirm its own report numbers. The check is always the same: find the issuer independently, look the document up there, and compare the holder, the manufacturer, the product model and the validity dates with what the supplier told you. Our five-step certificate authenticity protocol walks through it for each certificate type.Product certificates: check the issuer’s registerCCC (China Compulsory Certification): look the certificate number up on the public query platform of the Certification and Accreditation Administration of China (CNCA). A CCC certificate shows the product may be sold in China; it is not a substitute for your market’s requirements.IECEE CB scheme: CB test certificates for electrical products are recorded in the IECEE online certificate database; check that the manufacturer and factory location listed are the plant you are dealing with.CE with a notified body: where EU legislation requires a notified body, its four-digit number must appear in the European Commission’s NANDO database for that directive or regulation. Many CE products are self-declared, so a “CE certificate” from a test lab is often just a test report under another name.Private certification bodies (TÜV, SGS, Intertek, Bureau Veritas and others) run their own certificate lookups; use the URL from their official site, never a link or QR code printed on the supplier’s PDF.Test reports: match the applicant, the model and the dateTest reports are the most commonly borrowed document in Chinese sourcing. Read the first page: applicant and manufacturer names, model number, sample receipt date and the standard edition. A report issued to another company, for a model that is “the same as ours”, or against a withdrawn edition of the standard does not cover your goods. Chinese labs accredited by CNAS carry its mark, and the lab will confirm by email whether a report number is genuine.Mill test certificates for steel: ask for EN 10204 3.1For steel, the key document is the mill test certificate. Under EN 10204, a type 3.1 inspection certificate is issued by the manufacturer’s authorised inspection representative, independent of the manufacturing department, and reports actual test results for the product supplied. A type 3.2 is additionally countersigned by the purchaser’s representative or a third-party inspector. A type 2.2 report gives only typical values and proves nothing about your heat. Check that heat numbers on the certificate match the tags on the coils or bundles, that chemistry and mechanical properties fall inside your grade, and that the issuing mill is the one you were told about. Our guide to reading and verifying a mill test certificate covers the field-by-field checks.A heat-number tag inside a wire rod coil, photographed at the mill our team inspected for a Kazakhstan order. The number on the tag is what ties the coil to the mill certificate.Tier 3: the on-site audit checks what a video call cannotA video call shows what the supplier points the camera at. Showrooms can be borrowed and a neighbouring plant can be filmed. An audit is a working day on the floor with the freedom to walk where you choose, ask for the maintenance log, and count. This is the core of our supplier verification service, and it is where most “factories” that survived the desk checks either confirm themselves or fall apart.What to see on the floorThe company name on the gate and the building matches the licence, and the address matches the registry.The lines that make your product are installed, powered and running, not stored under covers.Work in progress on the floor is your product type, not something unrelated.Headcount on the shift is roughly consistent with the output claimed.Finished goods in the warehouse carry the factory’s own labels and packing marks.Production records, shift logs and maintenance logs exist and are current.Capacity maths: check the claim against what you countCapacity claims are nameplate numbers; you need the sustained number and the free share of it. Count the lines, note each one’s rated output, ask how many shifts and days a month they run, then apply a utilisation factor. An illustrative example: a mill claims 3,000 tonnes a month. You see two lines, each producing around 40 tonnes a shift, on two shifts, 26 days a month. That is about 4,160 tonnes at full rate, or roughly 3,100–3,500 tonnes at a realistic 75–85% utilisation, shared with every other customer. The claim is plausible, but a 1,000-tonne order takes a large share of a month, which should shape the delivery date you accept. When the counted figure is a third of the claim, the rest is subcontracted, and you should know to whom.Equipment ownership and raw material stockAsk whether key equipment and the building are owned or leased; a rented shed with leased machines can disappear in a month. Look at raw material stock: coils, resin, cells, glass or wire rod on the floor, with supplier labels you can read. A plant with no raw material in stock and none arriving is either idle or buying per order, which affects your lead time.The QC lab and incoming inspectionA serious manufacturer tests incoming material and finished goods in-house. Look for calibrated instruments with current calibration stickers, test records filed by batch, and a person whose job is QC rather than a salesperson who can also operate the tensile tester. For steel, that means chemical analysis and tensile testing at the mill; for solar modules, EL and flash testing on the line; for electrical equipment, hi-pot and functional testing. Missing equipment is not always fatal if the plant uses an accredited outside lab, but then ask to see those reports for recent batches.In our wire rod case for Kazakhstan, the 1,000-tonne order had come through traders. We found the mill behind them, walked the coil yard, and checked heat tags, strapping and coil weights before the balance was paid. That is the audit and the pre-shipment check working together: the mill was confirmed as real, and then the actual coils were confirmed as the ones on the paperwork.Strapped wire rod coils ready for despatch at the mill our team visited for a Kazakhstan order; strapping, tags and coil weights were checked before the balance.Tier 4: pre-shipment inspection happens at 80–100% productionPre-shipment inspection is done when production is complete, or nearly so, and at least 80% of the goods are packed, so the inspector can draw a random sample from the whole lot. It is scheduled before the balance is due, because once the balance is paid you have lost your only leverage. For manufactured goods, sampling follows ISO 2859-1: the lot size and inspection level give a sample size, and the acceptance quality limit (AQL) gives the maximum number of defective units that still passes. A common consumer-goods setting is general inspection level II with AQL 0 for critical defects, 2.5 for major and 4.0 for minor, but AQL is a commercial choice you agree with the supplier in the contract, not a law. How the visit runs, day by day, is covered in our guide on factory inspection before the balance payment, and the quality inspection service is the version we run for clients.Single sampling, normal inspection, general level II (ISO 2859-1): sample size and accept/reject numbersLot size (units)Code letterSample sizeAQL 2.5 (accept / reject)AQL 4.0 (accept / reject)501–1,200J805 / 67 / 81,201–3,200K1257 / 810 / 113,201–10,000L20010 / 1114 / 1510,001–35,000M31514 / 1521 / 22AQL sampling fits countable units: panels, cartons, machines, bags. It fits bulk steel poorly. For coils, bars or wire rod the inspection is heat by heat: tag-to-certificate matching, dimensional checks, coating mass for galvanized product, surface condition, coil or bundle weights against the packing list, strapping and marking. For equipment, the equivalent is a factory acceptance test against the agreed parameters before the machine is crated.The full checklist: what to check, how, and the red flagChinese factory verification checklistCheckHowRed flagCompany exists and is activeSearch the USCC on gsxt.gov.cn; compare with the licence scanStatus revoked or deregistered; on the abnormal operations listLicence details matchName, legal representative, address and date against the registry recordAny mismatch, or a licence scan that differs from the registryScope covers manufacturingRead 经营范围 for production wording and your product familyOnly sales, wholesale or import-export wordingRegistered and paid-in capitalRegistry record and annual report; compare with order sizeTiny capital or very young company for a large orderExport historyRedacted customs declarations or bills of lading; trade-data lookupNo exports, and no named exporter of recordFactory or traderAddress, product range, company name, photo reverse searchOffice-tower address, unrelated product lines, recycled photosBank account nameBeneficiary on the proforma against contract party and licencePersonal account, third company or offshore entity not in the contractProduct certificatesLook up on CNCA, IECEE, NANDO or the issuer’s own registerNot found, different holder, different factory or expiredTest reportsConfirm report number with the lab; check applicant, model and dateIssued to another company or for another modelSteel mill certificateEN 10204 3.1 with heat numbers; match against tagsType 2.2 only, heat numbers that do not match, untraceable millProduction linesOn-site audit: lines installed, powered and running your product typeLines idle or covered, WIP is another productCapacityCount lines × rated output × shifts × days × utilisationCounted capacity far below the claim, with no named subcontractorEquipment and premisesAsk about ownership or leases; look at the maintenance logEverything leased and short-term, no maintenance recordsRaw material stockMaterial on the floor with readable supplier labelsNo stock and no incoming materialQC labCalibrated instruments, batch test records, dedicated QC staffNo instruments, no records, sales staff doing QCFinished goodsPre-shipment inspection at 80–100% production, AQL or heat-by-heatSupplier refuses inspection or wants the balance firstWhen you don’t need a full factory auditNot every order justifies a day on site. The audit is worth its cost when the order is large relative to your business, when it is the first order with a new supplier, when the product is technical or safety-critical, or when the desk checks left questions open. It is often unnecessary in these situations:You are reordering from a supplier you audited recently, with no change of legal entity, address or bank account.The order is a small sample or trial quantity where the loss would be a cost of learning, not a threat to the business.The supplier is a well-known listed manufacturer whose plant is public knowledge; desk and document checks plus a pre-shipment inspection are usually enough.You are buying standard, commodity items from a distributor’s stock, where the risk sits in the goods themselves and a pre-shipment inspection covers it.What you should not skip, even in these cases, is the bank account check and the pre-shipment inspection before the balance. Those two are cheap and protect the money directly.What this checklist does NOT coverVerification tells you the supplier is real, capable and making what you ordered. It does not make your contract enforceable, set your payment terms, prove the product may be sold in your country, or protect your design. Those need a contract that names the specification, the inspection standard and the remedy for a failed inspection; payment terms that tie the balance to the inspection result; and certification for your destination market. Verification also ages: owners, managers and subcontractors change, so re-check the registry and bank details on every order and repeat the audit when something material changes.Common mistakes we seeTreating a video call as an audit. The camera shows what the supplier chooses to show.Checking the licence but not the bank account. A genuine factory’s licence paired with someone else’s bank details is how deposit fraud works.Accepting certificates as PDFs without looking them up on the issuer’s register.Believing nameplate capacity, then accepting a delivery date that only works if the plant runs at 100% for you alone.Paying the balance before the inspection report, because the supplier says the container booking cannot wait.Applying consumer-goods AQL to bulk steel, instead of checking heat numbers, weights and coating per heat.The question is never just whether the factory is real. It is whether the factory you checked is the one making your goods and the one receiving your money.FAQHow do I check a Chinese company’s business licence?Take the 18-character Unified Social Credit Code from the licence and search it on gsxt.gov.cn, the national enterprise credit registry. Compare the Chinese legal name, legal representative, address, date of establishment, status and scope of business with the scan the supplier sent. Any mismatch is a reason to stop and ask.How can I tell if a Chinese supplier is a factory or a trading company?Read the scope of business for production wording, compare the registered address with the factory photos, look at how wide the product range is, and ask for the plant’s address for a visit. A trading company’s scope lists sales and import-export only. The on-site audit settles the question for certain.Is a video call enough to verify a factory?No. A video call can rule a supplier out, for example when it cannot show a running line, but it cannot rule one in. Showrooms and neighbouring plants can be filmed. Use calls as a filter between desk checks and an on-site audit.What AQL should I use for pre-shipment inspection?For most manufactured consumer and industrial goods, buyers commonly agree AQL 0 for critical, 2.5 for major and 4.0 for minor defects at general inspection level II under ISO 2859-1. Tighter levels suit safety-critical items. Bulk steel is inspected heat by heat rather than by AQL.How much deposit is safe to pay a new Chinese supplier?A 30% deposit with 70% on inspection or against shipping documents is a common structure, but the safe amount depends on what verification you have done. Pay no deposit until the desk checks, the document checks and the bank account name all agree, and tie the balance to a passed pre-shipment inspection.Summary: the checklist in order1Search the Unified Social Credit Code on gsxt.gov.cn and match it to the licence.2Confirm the scope of business includes manufacturing your product.3Compare registered and paid-in capital and company age with the size of your order.4Ask for redacted export declarations or bills of lading.5Run the factory-or-trader tells and a reverse image search on factory photos.6Match the bank account name to the contract party and the licence.7Look up every certificate on the issuer’s own register.8Confirm test report numbers with the lab; check applicant, model and date.9For steel, require EN 10204 3.1 certificates with heat numbers you can match to tags.10Audit the plant: lines, capacity maths, equipment ownership, raw material, QC lab.11Inspect at 80–100% production, by AQL or heat by heat, before the balance.If you would rather have the tiers run by a team already in China, our supplier verification service covers desk and document checks and the on-site audit, then hands over to pre-shipment inspection before your balance is due. Since 2019 we have handled 3,500+ deliveries and built a base of 340+ verified suppliers.Written byArkadii VakhnovskyiFounder & CEOHow we write and check our guidesKeep readingRelated articlesGuidesHow to import from China: a step-by-step guide for first-time buyersThe full sequence of a first China import: spec, supplier, verification, samples, payment, inspection, shipping, customs and landed cost, with timings.Dmitry Markov·May 20, 2026·17 min readRead articleMarket & casesWhat importing from China really costs: the full landed-cost breakdownEvery line between the factory price and your warehouse: tooling, inspection, freight, duty, VAT and hidden costs, with September 2026 benchmarks and a worked example.Dmitry Markov·Apr 8, 2026·18 min readRead articleSourcing something from China?Put this into practice with a team on the ground in Jinan. Tell us what you need.Request a factory priceSupplier Verification