The deposit is the point of no return. While the money is still with you, you have leverage: you can negotiate, set conditions, walk away. The moment the deposit is gone, that leverage almost disappears and the risk becomes yours.
This checklist is built to be worked through point by point before you wire anything. Copy it, tick off every item. If even one of the red flags at the end is left unchecked, do not pay until you have cleared it up.
Step 1. Legal vetting of the company
First, confirm the company actually exists and is what it presents itself to be.
- A scan of the business license (营业执照) has been obtained
- The full legal name (in Chinese) matches across the website, the invoice and the bank account
- The Unified Social Credit Code (18 characters) has been verified in the state registry gsxt.gov.cn
- The company has been checked through Qichacha (企查查) or Tianyancha (天眼查) — history, owners, related legal entities
- The registration date matches the claimed experience (not "15 years in the market" for a company registered six months ago)
- The registered capital is adequate to the scale of the promises
- There are no alarming statuses — lawsuits or an "abnormal" company status in the registry
Step 2. Factory or intermediary
Confirm who you are actually dealing with — both your price and your control over quality depend on it.
- The license's scope of business (经营范围) contains manufacturing terms 生产 / 制造, not only 销售 / 贸易
- The product range is narrow and focused, not "steel + panels + furniture + electronics"
- Technical questions about the product get fast, specific answers
- The address is a production site in an industrial zone that is visible on satellite maps
We cover how to tell a manufacturer from a trader with confidence in a separate guide, Factory or intermediary: how to tell a manufacturer from a trader.
Step 3. Product, quality and capacity
Verify that the factory can make exactly your product at your volume.
- Production capacity backs your volume and lead time (number of lines, monthly output)
- Relevant certificates are in place (ISO 9001 plus product certificates — IEC/TÜV, CE/UL, mill certificate and so on) with a number that can be verified with the issuer
- A written specification has been agreed: material, dimensions, tolerances, marking
- A reference sample has been approved and sealed to check the batch against
- The MOQ and production lead time are fixed in writing
Step 4. Physical verification (audit)
Video and photos prove nothing. Only a fact on the ground confirms reality — and it must come before the balance payment.
- An on-site audit has been carried out or scheduled (in person or by a third-party inspector) before paying the 70% balance
- The factory address matches the address on the license
- It is confirmed that the equipment belongs to the company and that production really is running
- The export history / customs data has been checked under the company's own name
We lay out the full protocol for finding and verifying a factory in our foundational guide, How to find and verify a manufacturing factory in China.
Step 5. Contract and documents
Everything agreed in words has to be on paper — otherwise it does not exist.
- A contract or proforma invoice (PI) with the full specification has been signed
- The contract states the quality standard and the right to a pre-shipment inspection (PSI / AQL)
- The delivery terms are clearly stated (Incoterms — FOB / CIF / EXW)
- Penalties and the course of action for defects or delays are spelled out
- The currency, payment method and payment schedule have been agreed
Step 6. Payment and bank details — the most critical part
Most financial losses when importing from China are not about defects, but about the payment going to the wrong place.
- The payment terms are reasonable (for example, a 30% deposit / 70% before shipment), not 100% prepayment
- The beneficiary name on the account matches the company's legal name on the license exactly
- The payment does not go to the director's personal account or to a sudden third-party / Hong Kong account
- Any change of bank details ("our bank has changed") has been verified through a separate channel — a call to a known number, not a reply to the same email
- The details on the invoice have been reconciled against the business license
Red flags: if even one applies, do not pay
- The company refuses to provide the business license or the factory address
- The price is noticeably below market ("too good to be true")
- Pressure for full prepayment or payment to a personal / third-party account
- It cannot answer technical questions about the product
- It refuses a visit or an independent inspection
- The names on the license, the account, the website and the email domain do not match
One such item is a reason to ask more questions. Two or more together are a reason to stop the payment.
Who does this for you
Working through the whole checklist yourself is doable, but it takes the language, access to Chinese registries and a person who will physically walk into the factory before the deposit leaves. This is exactly what Silk Way Sourcing handles from Beijing: we read the license, reconcile the bank details, confirm the factory's status and inspect production on the ground, then run the deal end-to-end to Ukraine, the CIS, Africa and the Middle East.
