Investors are concerned about how to find reliable Chinese suppliers or potential partners. To address this concern, we have prepared the following tips based on our experience in the international trade area.
Before doing business in China, it is important to check the registered information and qualification of the counterparty. You cannot judge your potential partners only by their introductions, website, business card, even when this potential partner might also be introduced by your broker. In order to confirm whether or not you are dealing with a reliable partner, you need to require your Chinese partner to provide you with the scanned copy of its business license or its company name in Chinese. With the exact company name, you can start your initial due diligence on this company from the following websites.
1.National Enterprise Credit Information Publicity System（in Chinese: 国家企业信用信息公示系统）https://www.gsxt.gov.cn/index.html
In this website, you can find the basic information of the company, including its domicile, time of establishment and registered capital, etc. Additional information includes records of administrative punishment, abnormal operation and blacklist, if there is any.
2. China Judgements Online (in Chinese: 中国裁判文书网) http://wenshu.court.gov.cn/
Generally, the judgement is open to the public as a rule unless state secrets, business secrets or privacy of individuals are involved. Therefore, you can enter the company name and search for the relevant judgments so that you will know whether such company had prior disputes in the area of intended cooperation and thus further assess the feasibility of the cooperation.
3. China Enforcement Information Online (in Chinese: 中国执行信息公开网) http://zxgk.court.gov.cn/
In this website, you will be able to check whether the prospective partner has ongoing enforcement cases, whether it is included in the list of dishonest persons subject to enforcement and/or the list of persons subject to consumption restrictions. If the partner-to-be has ongoing enforcement cases, especially when it is listed as a dishonest person subject to enforcement, it is advised that you give it a second thought whether to cooperate with such company.
4. China National Intellectual Property Administration (in Chinese: 国家知识产权局) https://www.cnipa.gov.cn/
In this website, you have access to information about the ownership of patents and trademarks. So if your cooperation with the prospective Chinese partner involves its patents or trademarks, it is advisable to verify the ownership through this website.
Apart from the official websites above, there are commercial websites that are also helpful in due diligence, such as TianYanCha (in Chinese: 天眼查) (https://www.tianyancha.com/) and Qcc (in Chinese：企查查) (https://www.qcc.com/). Such commercial websites, relying on the technology of web crawling, provide a relatively comprehensive report by gathering information from the official websites. In these websites, more information is presented, covering the affiliated companies, judicial risks, risks in business operation, and state of business operation, etc.
If you don’t know Chinese, you can ask your Chinese friend to help you check the information of the Chinese partner. Or you may engage a lawyer in China to conduct the due diligence for you, especially for deals with a large amount of money. Although checking the above websites cannot eliminate all the risks, it is a big step for you to get to know your potential partner. This will guarantee that you are dealing with a legitimate company instead of a scammer. In addition, without the correct registered information of the Chinese company name, it will increase the difficulty to file lawsuit against your Chinese partner (if necessary).
If you need any assistance in due diligence, please feel free to contact us via firstname.lastname@example.org.