Opinions, knowledge and resources from China Checkup's expert contributors

5 Ways China Company English Names Can Be Misleading

by Matt Slater September 19, 2018

5 Ways China Company English Names Can Be Misleading

We often come across China company English names which we feel are misleading.

They are misleading for a number of reasons - some accidental, some deliberate, some cynical - but the root cause is that companies from Mainland China are registered in the Chinese language, not in English.

Here we give some background on China company English names and introduce the 5 ways in which we find they can be misleading.

What are China Company English Names?

The answer to this question isn't as simple as you'd imagine. This is because when companies from China are registered, they are done so entirely in the Chinese language.

Most Chinese companies actually don't have a need for an English name, but for the ones that deal with foreign companies, choosing an English name becomes a necessity in order to communicate and accept overseas payments.

There are many methods through which China company English names are chosen and in the majority of cases companies simply use a translation of their official Chinese company name into English.

During the process of verifying Chinese companies we do however find that some Chinese companies choice of an English name, whether intentionally or not, can give a misleading impression of their company.

Why would a Chinese Company Choose a Different English Name?

In China, official company names (in Chinese) are actually quite descriptive - they tell you where the company is registered, their key industry and their form of incorporation.

Because these official company names must be used in most business situations in China there is little room for ambiguity. Company names must follow a set structure which already reveal much information.

For example, we can easily determine that the Chinese company "河南省豫新反光材料有限公司" is:

  1. from Henan Province [河南省] 
  2. goes by the chosen name ‘Yuxin’ [豫新]
  3. deals in Reflective Materials [反光材料]
  4. is a limited liability company (Co., Ltd.) [有限公司]

    When a Chinese company is dealing overseas on the other hand, they find they have more freedom to define their company's identity in English. This can lead to China company English names being quite different from their official Chinese ones.

    We find there are two main reasons why Chinese companies choose an English name which isn't a direct translation:

    a) Chinese is More Concise Than English

    Imagine if Apple Inc.'s official name was "California State Apple Consumer Electronics Inc." - it doesn't exactly roll off the tongue does it!

    If American companies had to follow China's company naming convention this could well be their official name.

    When Chinese company names are translated into English they can often sound quite clumsy and be excessively long, so Chinese companies often chose a shortened English name to sound better and for convenience. Having a shorter name is just easier - the name takes up less space on business cards, brochures, product decals etc!

    b) Marketing & Branding Considerations

    For a wide variety of reasons (including cultural and commercial factors) many Chinese companies feel that they are better off making adjustments from the direct translation of their company's English name.

    For example the Chinese electronics company Xiaomi (小米) probably chose not to translate their name into English because it would be "Little Rice".

    Similarly, many Chinese consulting companies who are registered with the industry component "企业咨询管理" (Enterprise Management Consulting) simply abbreviate this to "Consulting".

    Different Ways China Company English Names Can Be Misleading

    Apart from the reasons explained above, there is regrettably another reason why Chinese companies choose an English business name which doesn't match their Chinese name - this is to mislead clients or disguise the nature of their business.

    Over the years we have come across examples of each of the following dubious English company naming practices: 

    1. Disguise Place of Registration

    • Happens with: companies registered offshore

    We are often asked to verify companies whose name starts with "Shanghai", "Beijing" or "Shandong" and give a China business address but find they are not registered here.

    These companies are often incorporated in Hong Kong or another offshore jurisdiction but do not reveal this to their clients.

    In many cases the offshore entity even holds an offshore bank account at a Mainland China bank to further disguise who the money is actually going to.

     

    Verify a China Company?

    Order online & get peace of mind

    Mainland China Company Verification Reports
    Cost: from $129 USD
    Turnaround: from 1 working day



     

    The fact that payment is being made to an offshore entity rather than a company in China presents many difficult questions in regards to enforcing contracts and when things go wrong.

    2. Disguise Nature of Business

    • Happens with: trading companies

    Many companies sourcing from China want to work directly with the factory that will manufacture their goods and are at pains to avoid being stuck working with a middle man. 

    Unfortunately we find many instances where trading companies (who can be easily identified from simply their official Chinese name) simply omit this detail when advertising products on the many sourcing websites.

    Finding out whether a company engages in manufacturing is usually as simple as reviewing the business scope of their China company registration.

    3. Wrongfully Claim Limited Liability

    • Happens with: sole traders

    Whether deliberate or not, we have seen many examples of Chinese sole traders incorrectly including the ending "Co., Ltd." on their English names.

    In many cases this might simply be due to a poor translation or that they don't have a good understanding of the different types of company registration in China.

    Either way this method of naming is clearly incorrect and gives a misleading impression of the nature of the company.

    4. Doesn't Reflect Company Structure

    • Happens with: multiple companies under single ownership

    This typically happens when the owner of two or more independently-registered Chinese companies refers to his/her companies as being "a group".

    In China, official group companies can be registered with the name "集团有限公司" (Group Co., Ltd.). However in many cases we find that apparent "group" entities aren't officially related - there is no holding company and one company isn't a subsidiary of the other.

    5. Be Unrelated to Official Chinese Name

    • Happens with: wide variety of companies

    Many Chinese companies choose an English name which seemingly has no resemblance to their official Chinese name. 

    There is nothing to stop them doing this and it is actually quite a common phenomenon. Here are some well-known examples of this:

    - Lenovo (Chinese name: 联想 / lián xiǎng)
    - Tencent (Chinese name: 腾讯 / téng xùn)
    - Warrior (Chinese name: 回力 / huí lì - meaning "return strength")
    - BenQ (Chinese name: 明基 / míng jī)

    Whilst some of these name changes are understandable for marketing purposes, especially for large established brands, in many cases it feels very difficult to justify.

    Having an unrelated English company name can lead to much confusion with overseas clients as well as presenting difficulties when it comes to verification.




    Matt Slater
    Matt Slater

    Author

    Hi there, I'm Matt, the founder of China Checkup. Originally from the UK, I am now based in Brisbane, Australia.

    Frustrated by the scarcity of concise, high-quality and timely information about Chinese companies, I setup China Checkup whilst living in Shanghai in 2013.

    My team are proud that China Checkup's company verification reports have now helped thousands of clients from all corners of the world to do business in China more safely.

      

     


    Related Articles

    What is the Unified Social Credit Code?
    What is the Unified Social Credit Code?
    If you've dealt with Chinese companies in recent years there is a good chance you will have come across the term "Unified Social Credit Code". This unique 18-digit number is issued to all companies and organizations in Mainland China and serves a var
    Read More
    What Information is Available from a Chinese Annual Return?
    What Information is Available from a Chinese Annual Return?
    Viewing information declared on a Chinese annual return is a useful method to learn more about a company from China. As in other countries, Chinese companies are required to make an annual return to the tax authorities to report their business perfor
    Read More
    China Free Trade Zones - Where Are They?
    China Free Trade Zones - Where Are They?
    Since establishing the first China Free Trade Zone in Shanghai in 2013, Chinese authorities have moved swiftly to establish a further 10 zones, with even more planned. Although the Shanghai Free Trade Zone is now fairly well known among foreign compa
    Read More


    Also in Safer, Better Business in China

    Which Bodies Manage Chinese Lab Accreditation?
    Which Bodies Manage Chinese Lab Accreditation?

    by Matt Slater December 11, 2018

    Chinese lab accreditation is managed by different accreditation bodies depending on whether the laboratory is located in Mainland China, Hong Kong or Taiwan.

    When you are importing products from China, requesting test reports to demonstrate that the product meets necessary standards can often be critical, and it is important for compliance purposes that these test reports are issued by accredited labs.

    In this article we introduce the different bodies responsible for managing Chinese lab accreditation and show you where you can search for a Chinese lab.

    Continue Reading

    Can You Trust Alibaba Suppliers?
    Can You Trust Alibaba Suppliers?

    by Matt Slater November 29, 2018

    Last year we ran a simple experiment on our website to find out whether or not our audience trust Alibaba suppliers. 

    Thousands of visitors to our blog received the automated message from our live chat software "Just a quick question, do you feel that you can trust an Alibaba supplier?".

    The 109 replies we received gave us some fascinating insights into the difficulties buyers face when deciding if they can trust Alibaba suppliers or not.

    Continue Reading

    5 Ways to Check Chinese Certificates are Legitimate
    5 Ways to Check Chinese Certificates are Legitimate

    by Matt Slater November 21, 2018

    Has your business ever needed to check Chinese certificates for fakes or forgeries? If so, you are not alone.

    Regrettably, it is quite common for some unscrupulous Chinese companies to use fake or altered certificates, unfairly tarnishing the reputation of the majority of companies that do the right thing.

    In this article we introduce 5 techniques you can use to check Chinese certificates are legitimate, so you can steer clear of the companies that hand out fakes.

    Continue Reading