Buyer questionAnswered from the China side
Know your supplier: four questions, two of which have public answers.
“Know your supplier” is borrowed from KYC, and the borrowing is where most of the confusion starts. A bank running KYC has a legal duty, a defined data set and a regulator reading over its shoulder. A buyer running KYS has none of those — only a set of questions and whatever evidence happens to exist. This page separates the KYS questions that a public record can settle from the ones that no record will ever answer, for the specific case where the supplier is a company registered in mainland China.
KNOW YOUR SUPPLIER / 01
Most KYS effort goes into the layer that is already easy.
Buyers tend to collect certificates, which are the most abundant evidence and the least conclusive. The layers below are ordered by how hard they are to fake, not by how easy they are to request.
What KYS is actually asking
Strip away the acronym and there is one question: is this counterparty what it presents itself as, and is it currently in good standing? KYC asks it of a customer because a regulator requires it. KYS asks it of a supplier because you are about to send money to someone you have never met, in a jurisdiction whose courts you will realistically never use.
That difference matters in one practical way. KYC has a defined finish line — the regulator specifies what must be collected. KYS has no finish line, so it is worth deciding in advance which questions are worth answering for the size of order in front of you. A US$3,000 trial order and a US$300,000 tooling commitment do not deserve the same effort.
The four layers, and which ones have public answers
Identity — who is the legal entity? Public. A registered company exists in a state register under one exact name, with one identifier. This is the layer that can be settled cheaply and completely, and it is the one most often skipped.
Standing — is that entity currently in good order? Public. Whether it is still active, whether it has been listed for irregularities, whether regulators have penalised it, whether courts have enforced against it.
Capability — can they actually make this? Not public. A registered scope of business tells you what a company is permitted to do, never what it is equipped to do. Capability is established by samples, by production audits, and by people who have visited.
Conduct — will they behave well when something goes wrong? Not public, and not knowable in advance. It is inferred from references, from how they handle the first small problem, and from whether their answers survive being checked.
The two public layers are worth doing first precisely because they are cheap. A supplier that fails at the identity layer never needs to be assessed on the other three.
What changes when the supplier is registered in mainland China
The legal name is Chinese, and only the Chinese name is the legal one. The English name on a storefront, a business card or a website is a trading style. It is not registered and it is not searchable. Any KYS process that starts from an English name starts from something that does not exist in the register.
There is a single national identifier. Every registered entity carries an 18-character Unified Social Credit Code (统一社会信用代码). It appears on the business licence, and it is what makes an unambiguous check possible. How to run the check and what the code encodes.
The registered scope of business is a legal text, not a marketing description. It is written in Chinese, filed with the registration authority, and it states the activities the company is registered to carry out — including whether it is registered to manufacture at all, as opposed to trade. Why the scope line is read before anything else.
The state record is published, but not always reachable from outside China. The National Enterprise Credit Information Publicity System (国家企业信用信息公示系统) is the official source. Overseas buyers frequently cannot load it, and that is an access problem rather than a data problem. What we measured about reaching it from outside China.
What a record check can actually evidence
These are the KYS items that come back with a source and a date rather than an opinion:
The entity exists and is still active. Registration status distinguishes a company in normal operation from one that has been struck off, revoked or is mid-liquidation — a distinction that a website will never show you.
The name and code belong to the same entity. When a supplier gives you a name and a code that do not resolve to the same record, you have learned something important before any money moves.
The registered scope covers what you are buying. Not proof of capability, but a company registered only for wholesale and import/export is telling you it is a trading company, whatever the website says. Reading factory versus trader from the scope.
Public irregularity and enforcement signals. Business-abnormality listings, administrative penalties, and former registered names each carry a different meaning. A name change is routine; a name change three weeks before your first order is a question worth asking. What change records do and do not imply.
What no amount of KYS will tell you
Being explicit about this is the difference between a useful process and a false sense of having done the work:
Product quality. No register holds it. It comes from an approved sample and an inspection against a written specification.
Delivery performance. Also not held anywhere public. It comes from your own order history, or from references who have placed comparable orders.
Whether they will subcontract your order. Extremely common, entirely invisible in any record, and best addressed in the contract and at inspection rather than in due diligence.
Financial health in the accounting sense. Non-listed Chinese companies do not publish financial statements. What the public record carries is distress signals, not a balance sheet. What the record can and cannot show about financial risk.
A clean record is not a clean bill of health. It means the state record shows nothing adverse at the date it was queried — which is a meaningful fact, and a much narrower one than “this is a good supplier”.
Where to start
If you have a supplier in front of you, the identity and standing layers are the ones to close first, because they are cheap, fast and decisive. Ask for a photograph of the business licence (营业执照) to get the exact registered name and code, then check them against the public record rather than against the document you were sent.
Every line we deliver names its source and the date it was queried, and states what it cannot show. We verify records; we do not certify suppliers, and we do not audit factories except as a separately arranged on-site visit.