Finding and vetting suppliers in China

Discovery and verification are different jobs

Finding a manufacturer in China and vetting one are two separate tasks, and most sourcing losses come from treating the first as if it settled the second. Discovery happens on commercial channels: B2B marketplaces, trade fairs, wholesale markets, referrals and sourcing agents. Every one of those channels is run by a business whose revenue comes from suppliers or buyers, and none of them is a government record. Verification happens against official documents: the supplier's business license, the national company register, test reports, audit reports and the contract itself.

No official Chinese government directory of manufacturers intended for foreign buyers could be confirmed by the desk's research. What the Chinese state does publish is a disclosure system. The National Enterprise Credit Information Publicity System (gsxt.gov.cn, the public register of company information) is the statutory disclosure channel for company information under State Council Order No. 784, in force since 1 July 2024. That register tells a buyer whether a company exists, what it is registered to do and how much capital its owners have committed. It does not tell a buyer whether the company makes the product, makes it well, or will deliver it on time.

One older filter has also lost its meaning. Since 30 December 2022, China no longer requires a separate foreign-trade operator registration, so a supplier's claim to "have export rights" no longer distinguishes it from any other registered company. Vetting therefore rests on a small number of checks that can be traced to a document, applied in a fixed order before money moves.

Factory, trading company or agent: who you are dealing with

The first question in vetting is not "is this supplier good?" but "what kind of company is this?" A factory owns or leases the production line. A trading company buys from factories and resells, usually adding export documentation, foreign-exchange handling, English-speaking staff or consolidation of several factories' goods. A sourcing agent acts for the buyer, in theory, and is paid by the buyer, the supplier or both.

None of these is inherently a poor choice. A trading company can be the right counterparty for a small mixed order. The problem is misidentification: a buyer who believes it is paying factory prices to a factory, and is in fact paying a reseller, has mispriced the order and may have no visibility into where the goods are made. That matters for quality control, for intellectual property and, under the Uyghur Forced Labor Prevention Act, for proving where inputs came from.

The official evidence for what a company is registered to do is its business scope (经营范围, the list of permitted activities printed on the business license and on the public register), together with its legal type. No official statistic on the share of marketplace suppliers that are trading companies was found; any figure circulating online should be treated as unsourced. The closest published figure comes from a market operator rather than a regulator: Zhejiang China Commodities City Group's 2025 annual report states that about 52.38% of merchants in the Yiwu market own their own factory, based on the operator's own survey with undisclosed methodology. Even in a market built around manufacturers, roughly half of the counterparties are not.

Sourcing agents are unregulated as a profession in both China and the United States; the desk found no licensing regime or official registry for them. An agent's own company can be checked on the register like any other Chinese company, and no official data on agent fee levels or the prevalence of kickbacks exist.

Checking the legal entity

Every legal person and organization in mainland China is assigned one Unified Social Credit Code (USCC, 统一社会信用代码), an 18-character identifier established by State Council document Guo Fa [2015] No. 33. The code links the business license to the public register, and its structure carries information a buyer can read:

• Position 1: the registration management department.
• Position 2: the organization type set by that department.
• Positions 3 to 8: the administrative-division code of the registering authority (110000 is Beijing).
• Positions 9 to 17: the subject identifier, which is the former organization code.
• Position 18: a check character.

Issuance to industry-and-commerce registrations began on 1 October 2015. The practical test is simple: the USCC on the license, the company name on the license, the name on the pro forma invoice and the name on the receiving bank account should all match one entity on gsxt.gov.cn. A mismatch at any point is a reason to stop.

The register also discloses capital. China's revised Company Law took effect on 1 July 2024 and requires a limited liability company's subscribed capital to be paid in full within five years of establishment. Under State Council Order No. 784, companies registered on or before 30 June 2024 must, before 30 June 2027, shorten any remaining contribution period that runs beyond five years from 1 July 2027, and changes to subscribed or paid-in capital must be published on the register within 20 working days. The Order sets no numeric threshold for "abnormal" capital; Article 3 leaves that to the registration authority's discretion. A large subscribed figure with little paid in is information, not a verdict, but it is cheap information to obtain.

Audits and certificates: what each one proves

A certificate answers a narrower question than most buyers assume. Reading one well means knowing who issued it, what it covers and what it was never designed to show.

• ISO 9001:2015 sets requirements for a quality management system. Certificates are issued by third-party certification bodies, not by ISO itself, and they attest to a management system rather than to the quality of any product.
• amfori BSCI is, in amfori's own words, "not a certification." Its audit has 81 questions across 13 performance areas, produces a grade from A to E, runs on a two-year cycle and requires follow-up within 2 to 12 months for C, D and E grades.
• SMETA (Sedex Members Ethical Trade Audit) is described by Sedex as "a continuous improvement methodology rather than a certification." A two-pillar audit covers labor standards and health and safety; a four-pillar audit adds environment and business ethics.

Social-compliance audits matter for US importers because forced-labor exposure is a customs issue, not only a reputational one: goods linked to Xinjiang or to entities on the UFLPA Entity List are presumed inadmissible. A factory audit, whether commissioned by the buyer or bought by the supplier from a platform, is the place to confirm that the production address on the license is the address being audited and that the business scope covers the work.

Samples and inspection

Samples and inspection are where vetting meets the product. A sample shows what a supplier can make once; a pre-shipment inspection shows what it made in volume. Neither is defined by any regulator, so the terms of each belong in writing: which sample is the "golden sample" against which production is judged, who pays for it, and what happens if production deviates.

Two dated facts change common practice. First, the reference standard for attribute sampling has moved: ISO 2859-1:1999, the standard behind most AQL (acceptance quality limit, the defect rate a sampling plan is designed to accept) tables, is now withdrawn and revised by ISO 2859-1:2026. Whether the 2026 edition changed its tables or switching rules has not been confirmed, so inspection contracts should name the edition they rely on. Second, US de minimis treatment has been suspended for shipments from all countries since August 2025, after China and Hong Kong in May 2025. Samples sent by express now enter as formal or informal entries and can carry duty.

Inspection also has limits worth stating plainly. CBP's counterfeit seizures in FY2025 included 1,187,193 consumer-electronics items and 880,546 toys by quantity, but those are intellectual-property seizures, not quality findings; border enforcement does not substitute for an inspection the buyer specifies.

Intellectual property before you share a design

China's trademark system is first-to-file: the first applicant generally gets the mark. USTR's 2026 Special 301 Report keeps China on the Priority Watch List and states that "bad faith trademarks remain one of the most significant challenges for U.S. brand owners in China." The same report describes stakeholders' accounts of "high evidentiary burdens, limited discovery" and difficulty "obtaining deterrent-level damages awards" in trade-secret cases. That is why trademark filing in China, and a written confidentiality and non-use agreement, belong before a detailed design brief or a sample request, not after.

The scale of filing activity shows why a brand cannot assume space is free. The China National Intellectual Property Administration (CNIPA) recorded 6,952,550 trademark applications and 4,205,797 registrations in 2025; US-origin applicants filed 40,944 applications. For product appearance, CNIPA granted 666,245 design patents in 2025, 18,020 of them to foreign-origin applicants.

The counterfeit data point the same way, and the two ways of measuring them should not be mixed. By value, China and Hong Kong accounted for about 87% of the MSRP of goods CBP seized for IP violations in FY2025; by quantity, they accounted for about 67%. CBP notes that MSRP values the goods as if genuine and that its seizure figures are workload statistics, not trade statistics. Packaging and labels are themselves seizure categories, which is one reason a brand owner should control who prints branded boxes.

The labels "OEM" and "ODM" (original equipment manufacturer and original design manufacturer) are commercial terms with no regulatory definition, and their sourcing usage differs from the automotive sense of "OEM." Who owns the tooling, drawings and design is settled by the contract, not by the label.

Contracts, payment and the fraud that targets both

For a sale of goods between a US buyer and a mainland-China seller, the UN Convention on Contracts for the International Sale of Goods (CISG) applies by default unless the contract excludes it. Both countries have been parties since 1 January 1988, and both declared they are not bound by Article 1(1)(b). A contract that is silent on governing law is therefore not silent at all, and January 2024 amendments to China's Civil Procedure Law expanded Chinese courts' jurisdiction over cases with foreign parties, according to USTR.

Payment is where vetting failures become losses. The FBI's Internet Crime Complaint Center (IC3) recorded, in its 2025 Internet Crime Report, 24,768 business email compromise complaints with $3,046,598,558 in reported losses in 2025. IC3 defines BEC as a scam targeting those "working with suppliers and/or businesses regularly performing wire transfer payments." The figures are self-reported by victims who filed, and they cover all BEC, not only supplier payments, but the mechanism is the one importers face: a genuine-looking email announcing new bank details. The control is procedural: confirm any change of beneficiary by a channel the buyer already holds, and check that the account name matches the licensed entity.

Speed matters after a fraud. IC3's Recovery Asset Team froze $679,013,183 of $1,163,919,846 in attempted theft across 3,900 incidents in 2025, a 58% success rate across all eligible crime types, but only 326 of those incidents were international. IC3's guidance is that "time is of the essence": contact the bank immediately to request a recall and file a report at ic3.gov. Letters of credit, governed in most cases by the ICC's UCP 600 rules, and platform escrow programs shift payment risk in different ways; the guides in this section compare them.

Frequently asked questions

Sources

• State Council of the PRC (text reposted by Ministry of Ecology and Environment) — Provisions of the State Council on Implementing the Registered Cap… (2024, HTML-official)
• National Development and Reform Commission / State Council — State Council approval of the NDRC plan on a unified social credit code system for lega… (2015, HTML-official)
• FBI IC3 — FBI Internet Crime Report 2025 (2025, PDF)
• Office of the United States Trade Representative — 2026 Special 301 Report (citing OECD-EUIPO studies) (2026, PDF)
• U.S. Customs and Border Protection — Intellectual Property Rights Seizure Statistics, Fiscal Year 2025 (Publication 5471-0326) (2025, PDF)
• International Organization for Standardization — ISO catalog entry ISO 2859-1:1999 (2026, HTML-official)
• UNCITRAL — Status: United Nations Convention on Contracts for the International Sale of Goods (Vienna, 1980) (2026, HTML-official)
• China National Intellectual Property Administration (CNIPA) — 2025 Intellectual Property Statistical Annual Report, Table 7-1 (Annual Trademark Appl… (2025, HTML-official)