Verifying Chinese Companies Before Working With Them
by Carrie Hinkel on December 31st, 2007
If you’ve been thinking about doing business with a Chinese company (perhaps importing their products), but are worried because of the seemingly endless stories of overseas scammers, then read on. Just like in the U.S., there are tons of scammers in China just waiting to take your money and run. However, it’s pretty easy to spot these fake businesses with just a minimal amount of research.
Never take your potential business partner’s word that they are an established company. Always verify them by checking several sources, including:
Chinese yellow pages listing - This is a good place to start. Most scammers won’t bother placing a listing here because they don’t want to give out their contact information publicly. However, not all legitimate companies list with these pages either, so it’s a starting point, not an end point. The websites are in Chinese so they will need to be translated, or if you know just a little Chinese you will be able to get around the site and look up any company. Here are a few listing sites: www.yp.net.cn , www.chinaeall.com , http://www.cnaic.org.cn/ .
Contact information - As mentioned above, many scammers don’t like giving out their contact information. Always ask for a street address, phone number, mobile phone number and fax number. Then check each of them out. If you have other contacts in China you might ask them about checking out the physical address – just in case the scammer is giving you a fake address.
Government issued corporate number - In order to be a legally operating company in China, every business needs a unique corporate number. Scammers typically do not have this number, so always ask for it. However, you will need to verify it in case the scammer is giving you a fake number. You will need to check the government office of the province in which the company is located. For instance, for the Changsha province, the website is: http://www.csaic.gov.cn/ .
Embassy records - The U.S. Embassy in China keeps records of reports and claims made against scammers in China. It’s a good idea to check the company name and any contact names with the Embassy. Their website is: http:// www.buyusa.gov/china/en/
If everything checks out, then chances are the company you are dealing with is a legal and legitimate company in China. That’s great, but your research is far from over. Just because they are a legally operating company doesn’t mean that they are trustworthy or reliable. Just like companies in the United States, there are plenty of registered businesses that operate in a less-than-honest fashion. So, how can you make sure that your potential business partner is one you can trust? Your best defense against unscrupulous companies is the Internet. Do a Google search for the company name and the names of any individuals you have been dealing with. You can also ask around in online wholesaler and importer forums and see if anyone has worked with them before.
On the internet, negative word of mouth spreads fast. So if someone’s been burned by a Chinese company, there’s a good chance they’ll spread the word to warn others.