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How to distinguish the authenticity of Chinese companies and factories

by · 6/16/2020, 2:06:30 AM

When you do business with a company in China, one of your most basic concerns may be "is this Chinese company real?".

In Chinese mainland, all companies must register with the authorities and hold valid business licenses. That's how we define whether a company is "real.".

"Is this Chinese company real?" It seems like an obvious problem, but unfortunately, we often prepare company verification services for our customers, but we are negative about this most basic requirement.

Worthy of attention

For a variety of reasons, it is a very reasonable question to worry about whether Chinese companies are real:

l Like any other country, China is full of liars and swindlers

l Some Chinese companies continue to do business despite having their business licenses revoked

l Some Chinese companies don't have business licenses at all

l Some Chinese companies are actually middleman trading companies, pretending to be suppliers

l Sometimes you may even trade with complex traders, each cutting back on volume

l Some companies actually registered in Hongkong or elsewhere when they claimed to be registered in Chinese mainland.

Protect your business

If you deal with a suspicious company in China, you may be very lucky not to encounter any problems. However, if problems do arise, you may find it difficult to deal with an unregistered company, an intermediary trading company pretending to be a supplier, or a company with a business. The license was revoked. In this case, it can be very difficult to put legal pressure on the company.

It is also worth remembering that if there is a problem, it is not necessarily malicious, nor is it necessarily intentional behavior of Chinese companies. If they have financial, legal or procurement problems, the company may give up the order or contract, even though the relationship has good intentions at the beginning.

However, when your suppliers suddenly disappear, it will bring you a little comfort!

For all these reasons, it's important to know if you're dealing with a trusted, real company.

Are Chinese companies real? How to check?

There are many ways to check if the Chinese company you are working with is a real company.

1. Do you have a company website?

The most basic of these checks, which anyone can perform, is to find the company's website. This may sound obvious, but in the past, we have helped to deal with customers with direct fraud consequences, in which a single person pretends to be a real company and accepts "orders" for products. In some cases, just checking the presence of the company's website before the trouble starts can cause doubt.

Of course, your first action will be to search in English using Google. Most Chinese companies have English names and use them on their websites. However, you should always remember that Chinese companies will be officially registered and licensed under Chinese names. If not, grab it and search for it on Google or Baidu. If it seems that the problem can be solved, it seems that the company may exist, but at this stage, you cannot make any assumptions beyond this assumption.

2. Is the company registered?

Even if the company you are working with seems to exist online, this does not confirm that it is a real company. You need to check that the company is registered with the local AIC (Administration for Industry and Commerce).

Each of China's 34 provinces has its own AIC, which works in a slightly different way. In any case, you will need to find and visit the Bureau's website and search the company's registration records using its Chinese name.

This basic check proves that the company is registered, but many AIC sites are not doing well in keeping their online records up-to-date.

For example, companies whose business licenses have been revoked may still list without warning. For a more thorough inspection, you need to go to the local AIC in person and ask for a hard copy of its latest records.

3. Does the company have a valid business license?

If the company appears to be properly registered with the local AIC, the next step is to request a copy of its business license.

This is a very common requirement in business transactions in China, so please be alert if the company you are dealing with has any resistance or trouble on this issue. Real companies will be very willing to send copies of their business licenses.

Of course, the business license will be in Chinese. If you don't have the experience of using the language, it may be difficult to understand.

4. Do I really contact the company?

After performing these basic checks, you should be able to determine the answer to the question: "are Chinese companies real or not?" And know which Chinese company is behind the English name.

However, after that, you need to do more checks to ensure that the company is not only authentic, but also trustworthy, able to fulfill your orders, and so on.

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