China Sourcing Guide · Reviewed against a sourcing agent's notes

How to avoid China supplier scams

The scams you are most likely to meet

• Quality substitution. The sample is good; the production batch uses cheaper materials or looser tolerances. The most common problem by far.
• Fake factory. A trader presents itself as the manufacturer, adds a margin, and has no control over quality or timing.
• Deposit disappearance. A new “supplier” takes the deposit and stops replying — often with a professional-looking website and catalogue.
• Fake certificates. Papers for CE, FDA, RoHS or similar are presented but were never issued for that product.
• Inflated freight. A cheap unit price is recovered through an inflated shipping quote from an associated forwarder.
• Bait and switch on specification. The quote is for a lower grade than the one you thought you were buying; the details are buried in the annex.

Six verification checks

1. Business licence. Ask for the licence and check the registration number in China's national enterprise credit information system. Confirm the company name, status and registered address.
2. Legal representative. The name on the licence should match the person you are dealing with, or the company should confirm their authority in writing.
3. Factory or trader? Ask directly. Neither is automatically bad — but a trader usually adds cost and reduces your control, so know which you are buying from.
4. Live video call. Ask for a walkthrough of the production area, not a set of photos. A supplier that cannot show the line is usually not producing.
5. Sample first. Order a sample and keep it. Make the sample the written quality standard for the order.
6. Bank account name. The account must be in the company's name, matching the licence. Mismatches are the single biggest warning sign.

Payment rules that protect you

• Company account only. Never pay a personal account, a third party's account, or a different company's account — however plausible the explanation.
• Use trade assurance or escrow where the platform offers it, so payment is released against agreed terms.
• Split the payment. A common structure is a deposit to start production and the balance against shipping documents or after inspection. Never pay 100% up front to a new supplier.
• Letter of credit for large orders. For substantial amounts, an LC adds bank-level documentation requirements.
• No irreversible methods. Avoid Western Union, crypto and gift cards; they are effectively unrecoverable and are standard in fraud.

Red flags to walk away from

• A price far below every other quote for the same specification.
• Pressure to pay immediately, or a “discount” that expires today.
• Reluctance to provide the business licence or to video call.
• Bank account details that change at the last minute.
• No written specification, or a contract that omits quality, timing and remedies.
• Requests to communicate only on personal messaging accounts with no record.

If something goes wrong

1. Keep everything: the contract, the sample, the chat history, the invoice and the payment record.
2. Photograph the goods and packaging as received, before you move them.
3. Notify the supplier in writing immediately, stating the specific breach.
4. Use the platform's dispute channel or your payment provider within its deadline — these windows are short.
5. For significant losses, consider a third-party inspection report or legal advice; cross-border claims are difficult without documentation.

Frequently asked questions