One of the most important things to do when you’re importing from China is to check the credit status of the suppliers you’re working with. In this way, both the suppliers and buyers can establish trust, and high-risk scams can be avoided.
What is a business credit report?
A business credit report is an aggregate of a company’s credit history. It allows you to evaluate the creditworthiness of your suppliers before entering into a business relationship with a new company. A professional credit report includes the factors listed below.
| Report Content | Details | Report Content | Details |
| Identification | 1. Subject name 2. Alternate style 3. Operating address 4. Telephone/Fax/Email 5. Website | Corporate Affiliations | 1. Business name 2. Affiliation type 3. Address |
| Credit Risk Rating | 1. Risk rating 2. Interpretations 3. Full analysis 4. Credit limit 5. Country payment norms | Bank & Financing | 1. Lisk of banks Bank name Dirección Relationship type Account number/s 2. Charges & mortgages |
| Registry Data | 1. Date established 2. Legal form 3. Registration number 4. Registry authority 5. Fiscal/Tax id number/s 6. Registry status 7. Previous names | Operations & History | 1. Brief description 2. Full description 3. Brands 4. Local sources 5. Imported sources 6. Export destinations 7. Recent events 8. Trade bodies 9. Industry trends 10. History |
| Legal Filings | 1. Bankruptcy filings 2. Court judgments 3. Tax liens 4. Other | Property & Assets | 1. Description of premises 2. Branch locations 3. Other property 4. Capital equipment 5. Patent and certificates |
| Management & Stuff | 1. Executive officers 2. Numbers of employees | Financial Accounts | 1. Filing requirements 2. Sources 3. Presentation style 4. Date of accounts 5. Currency 6. Exchange rate 7. Financial highlights Sales turnover Pre-tax profit Net profit Total current liabilities Total long term liabs Total liabilities 8. Additional financial 9. Ratios and analysis |
With such a professional credit report, you will know immediately if this supplier is trustworthy and worth working with.
How to run a business credit check in China?
It’s important to run a business credit check, but how exactly do you do it for a Chinese company? Take the following steps to protect your business.
Step 1: Acquiring Business Information
To get an accurate business report in China, knowing the English name of the company is not enough (as translations often change). You must ask the supplier for their 18-digit Unified Social Credit Code (found on their Chinese business license) and their official Chinese registered name.
Step 2: Run a business credit check
In China, corporate credit records are tracked by the government’s official National Enterprise Credit Information Publicity System (NECIPS). However, because this system and other local directories are entirely in Chinese and often require a Chinese ID to access, doing it yourself can be nearly impossible.
Normally, you have two options:
- Use an International Online Agency: You can hire established global credit agencies (like Experian or Sinosure) to pull a report for you.
- Work with a Local Sourcing Agent: Your sourcing partner on the ground can quickly verify the company’s background, check local court judgments, and visit the factory directly to confirm their operational status.
Before placing large orders with unknown suppliers, make sure you check their credit status so you don’t get cheated.
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