China sourcing

The four ways importers lose money to fraud, and the check that stops each one

Almost none of it is sophisticated. It works because it arrives at a moment when you are in a hurry, and because the checks that would catch it take ten minutes nobody spends.

By RomainFrance → China23.09.2026

Supplier fraud in China is not mysterious. It follows a small number of patterns that repeat, and each has a cheap, specific countermeasure. What makes it work is timing: it lands when a deadline is close and when asking another question feels like an insult to a relationship you have been building for months.

One: the changed bank details

An email arrives from your usual contact, in the usual thread, saying the company account is under audit and this payment should go to a different account — often in a different city, sometimes in Hong Kong. The mailbox has been compromised, or the domain is off by one character.

The check: never accept a change of bank details by email. Call a number you already had, before the request, and speak to a person you have met. Not the number in the signature of that email. This single rule prevents the largest single category of loss in the trade.

Two: the account that is not the company's

You are asked to pay an individual, or a trading company with a different name from the one on your contract, “for tax reasons”. Sometimes the explanation is genuine. The consequence is not: money paid to a party that is not your counterparty leaves you with no contractual claim against the company that owes you goods.

The check: the beneficiary name must match the company name on the contract and on the business licence, character for character. If it cannot, you have learned something important about who you are actually dealing with.

Three: the company that does not exist as described

The factory in the photographs belongs to someone else. The business licence is real but belongs to a shell, or its registered scope does not include manufacturing what you are buying, or its capital is trivial.

The check: get the Chinese-language business licence, not an English summary, and have the registration number verified against the public register. It takes minutes and tells you the legal name, the registered scope, the capital and whether the company is subject to enforcement proceedings.

Four: the substitution after approval

The golden sample is right. The first production run is right. The third shipment has a cheaper component, a thinner wall, a different grade of steel. Nothing was announced because nothing was asked.

The check: keep inspecting after the relationship is established. The temptation to stop paying for inspection once things are going well is exactly what the pattern relies on. Reduce the frequency if you must; do not go to zero.

The common thread is that all four are caught by verification against a source the counterparty does not control: a public register, a phone number you already had, a third-party inspector. Anything the supplier sends you is a claim, not evidence.

Questions we get on this.

A supplier asks me to pay a Hong Kong account. Is that a red flag?

Not in itself — many legitimate Chinese exporters invoice through a Hong Kong entity. It becomes a red flag when the request arrives late, by email, for an order already agreed, or when the beneficiary name does not match your contractual counterparty.

Keep reading on this.

France–ChinaChecking a Chinese company before you commitMost of it is public, most of it is free, and it takes an afternoon. Almost nobody does it, and it is the cheapest insurance in the whole relationship.China sourcingPaying a Chinese supplier: deposits, transfers and letters of creditThe payment structure is a risk allocation, not an administrative detail. It also tells the supplier a great deal about how you will behave.China sourcingQualifying a Chinese supplier: what to check before the first orderFinding candidates is cheap and fast. Establishing that one of them can actually deliver what you need is the work — and it is mostly unglamorous.China sourcingChoosing who inspects your goods, and writing a brief they can failThe big names and the small independents fail differently. What matters more than the logo is whether your checklist lets an inspector say no.

If this raised a question about your own project, tell us where you are — the first conversation usually clarifies more than a proposal.

Talk about your product →Read the full guide