5 Red Flags When Sourcing from China

Most overseas buyers don’t lose money because China is “risky.” They lose money because they ignore early warning signs.

Here are five major red flags you should never ignore before sending a deposit.

1. The Supplier Refuses to Provide Full Chinese Company Name

If a supplier only gives you an English name, that’s a problem.

Every legitimate Chinese company has a registered Chinese legal entity name. Without it, you cannot verify registration or legal records.

2. Bank Account Name Doesn’t Match Company Name

If payment is requested to:

• Personal bank accounts
• Different company names
• Hong Kong trading accounts unrelated to contract entity

This increases financial risk significantly.

3. Extremely High Deposit Requirements

Standard structure is 30% deposit, 70% before shipment.

Red flags include:

• 50%+ upfront
• 100% pre-production payment
• No contract terms

4. Unrealistically Low Pricing

If a quote is dramatically lower than competitors, ask why.

Common reasons:

• Lower quality materials
• No actual factory (middleman)
• Future “add-on” charges

5. No Verifiable Business History

Check:

• Years since establishment
• Court records
• Operational status

Multiple enforcement cases or abnormal listings are warning signals.

How to Reduce Risk Before Deposit

Before wiring funds, structured verification can reduce uncertainty.

Our Safety Shield report reviews:

• Official registration
• Legal records
• Operational stability
• Clear risk grading

Final Thoughts

Sourcing from China is not inherently dangerous.

Ignoring warning signs is.

Treat verification as risk management — not distrust.