Due Diligence
October 2013

Is the Chinese Company You’re Doing Business with Located in an Urban or Rural Area?

Without knowing if the Chinese company you’re dealing with is located in a first-tier city, second-tier city or even a rural area, you won’t be able to include any of these issues in your considerations. Because of that, it’s a good idea to confirm where a Chinese company is located and do a little research.

Why Determining Location is Important

It’s advisable to find out if the Chinese company you’re doing business with located in an urban or rural area before doing business with them. The difference between first-tier and second-tier Chinese cities is also important. These differences are significant for a number of reasons:

  • The logistical infrastructure will differ hugely between different regions of China, which will be a central consideration in the shipping of your product
  • The local knowledge and available talent will also be markedly different, particularly in knowledge of international business and manufacturing standards
  • Costs will vary significantly between different locations in China

The Key is in the Name

The name of a Chinese company often includes its location, which is a useful start. However, many companies are of course keen to associate themselves with better known locations with more prestige, such as major cities or locations famous for producing a particular product.

For this reason, it may not be wise to take their claimed location at face value. Besides that, the registered address may be different to the place of manufacture. A third issue is that you may in fact be dealing with a trading company and not the supplier. Determining all of this information will require some research.

Researching a Chinese Company

The first thing to determine is the registered address, which will make a good starting point. This will be listed on the company’s business license, which you should request a copy of as a matter of course. The registered address looks like this on the business license:

If you don’t have access to a company’s Chinese business license, or you want to confirm the information shown on it, you can look up the company’s public registration record. Each province in China makes these records available to the general public via the website of its AIC (Industrial and Commercial Administration Bureau, 工商行政管理局, Gōngshāng Xíngzhèng Guǎnlǐjú). On the AIC website, you can perform a search for the company’s full Chinese name. This will locate its public registration record, which will include the registered address. Use our glossary to help make sense of it.

From there, you’ll need to verify the company’s registered address against the one stated on its website or in communications, and begin researching this location. Find out if it’s a first-tier, second-tier or lower tier city or a rural area, and research the local climate and economy. You may also be able to find reviews and comments of the company if it offers its products online through a service like Alibaba. Try to find out what the major industries of the area are, what its most famous and largest product categories are, and potentially other issues such as population, migration and education.

A China Checkup company verification report can make this process much easier for you. All that’s required on your part is some identifying information about a Chinese company, such as its English name and website address (we can work with what you’ve got though!), and we’ll find the information you need. We’ll locate the company and its public registration record, translate and explain this information, and provide a detailed provincial fact file about the area its located in. Using our service is simple, and gives you the knowledge you need to make an informed decision about a Chinese company.

Making a Visit

Using the process above, or by using a China Checkup Report, you can cut the wheat from the chaff and carefully select which manufacturers are worth your time.

If you’re planning to make a visit to China or send employees to view manufacturers, this information can save you time and trouble by eliminating lower quality choices early on.

Verify a China Company.

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Further reading