Is my Chinese supplier a factory or a trading company?
Check the registered business scope on the company’s Chinese business licence. A manufacturer’s scope contains 生产 or 制造 (production/manufacturing) for the relevant goods; a trader’s scope contains only 销售 or 贸易 (sales/trade). Scope is the strongest single signal, but confirm it against headcount, address type and site evidence before you rely on it.
This is the most consequential question in China sourcing, and almost nobody asks it directly. A trading company is not a scam — many are excellent, and for small volumes a good trader beats a bad factory. But you need to know which one you are talking to, because it changes three things: the price you should be paying, who actually controls quality, and who you can hold responsible when a shipment is wrong.
The five signals, in order of reliability
| Signal | What a real manufacturer looks like | How hard to fake |
|---|---|---|
| Registered business scope (经营范围) | Contains 生产 / 制造 for the product category — not just 销售 or 贸易 | Very hard — it is the state registry |
| Registered capital and paid-in capital | Meaningful capital for a plant; a trader can register with almost nothing | Hard |
| Social-insurance headcount | Dozens to hundreds. A trading company shows a handful | Hard |
| Registered address | An industrial park or plant address, not an office tower suite | Moderate |
| Photos, video, certificates | Consistent with the above, and filmed on request | Easy to fake — never rely on this alone |
Why the business scope is the strongest test
Chinese companies do not have a free-text description of what they do. The scope is a controlled field on the business licence, registered with the market-regulation authority and published on the national credit information system. A company cannot quietly add “manufacturing” to it — that requires a filing. So when a supplier’s scope covers only sales and trade while their website shows a production line, you are looking at either a trader presenting a partner’s plant as their own, or a group where the manufacturing sits in a different legal entity than the one on your contract.
That second case matters more than people expect. If the factory is a sister company and your contract is with the trading entity, the manufacturer has no obligation to you at all. Ask which entity will be named on the invoice, the packing list and the certificate of origin — and check that entity, not the one that emailed you.
The headcount test
A company’s social-insurance contribution headcount is published in its annual report on the national credit system. It is a rough number and it lags, but it is very hard to inflate, because every contributor costs the employer money. A “factory” with four insured employees is not a factory. A trading company with four insured employees is exactly what it appears to be — which is fine, if that is what you thought you were buying from.
What none of this tells you
- Whether they can make your product to your specification. Scope covers a category, not a capability.
- Whether their quality is good. The registry has no opinion on that.
- Whether the plant you were shown on video is theirs. Only a visit or a live, unscripted walkthrough settles that.
- Whether they are financially healthy. Registry data lags; court records and abnormal-operation listings help but are not a credit report.
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Sources
All sources checked 23 August 2026. This page is general information, not legal, tax or customs advice. Requirements vary by product, market and circumstance — confirm your own position before acting.
