How to conduct a litigation check on a Chinese company

A background investigation of a Chinese company should always include a litigation check that examines compliance with local regulations and involvement in legal disputes. I will here introduce the two most important sources that are completely free to use and fundamental for conducting a comprehensive litigation check on a Chinese company.

The first litigation check source - NECIPS

The National Enterprise Credit Information Publicity System (NECIPS) holds registration data on all legal entities in China (read more about NECIPS here) but also discloses information on legal compliance.

How visitors can search for legal compliance records in the NECIPS databank is exemplified by a case study of Tianjin Sayca Wood Co., Ltd (天津赛克木业有限公司) that I have been investigating before.

The screenshot from the NECIPs databank shows that the operation status (highlighted in blue) for Tianjin Sayca Wood Co., Ltd is active but there is one remark about abnormal business operation (highlighted in red).

In the bottom of the screenshot there are shortcuts to four different categories of legal compliance information:

1. Administrative licensing information (Remarks on licensing/registration that do not comply with requirements. )
2. Information on Administrative penalties (penalties by government authorities and  regulatory bodies)
3. Abnormal business operations
4. Blacklisted and dishonest operation with law violation record.

There are no remarks to Tianjin Sayca Wood Co., Ltd under administrative licensing (category 1) and the company has no blacklisting records (category 4) but there is one record under administrative penalties (category 2)

The record tells that on 9th of October 2015, Tianjin Sayca Wood Co., Ltd was fined CNY 220,000  by the Environmental Bureau in Tianjin due to air pollutants that exceeded the limit. The information shows that Sayca Wood has paid the fine.

Under abnormal business operation (category 3) there are 4 records issued by  the Tianjin Market and Quality Supervision Administration:

The first record shows that Tianjin Market and Quality Supervision Administration has been unable to contact the company in December 2017. The other 3 records are addressing negligence to submit required information in the annual report to Tianjin Market and Quality Supervision Administration.

The 4 records that belong to abnormal business operation are not serious violations but they do indicate possible operation irregularities and being on the watchlist for abnormal business operation can have an impact on credibility and confine business activities.

The Second Litigation Check Source - China's Enforcement Information Website

China's Enforcement Information Website is hosted by The People's Supreme Court and it is a public platform where visitors can search for lawsuit cases that involve individuals and companies. Below is a screenshot of the front page of the Enforcement Information Website:

On the screenshot there four numbered inquiry categories that combined provides a comprehensive litigation search on a Chinese company. The numbered four categories are:

1. Information on blacklisted dishonest companies that have failed to comply with court orders.
2. Information on companies who are subject to enforcement by a judgment
3. Information on termination or closure of enforcement case
4. Information on court rulings from China Judgements Online

Search for information on dishonest companies

To illustrate how the different inquiries work in practice, I will use Tianjin Sayca Wood Co., Ltd again. The first inquiry is on companies that are blacklisted as dishonest because they have failed to comply with court orders. Here is a screenshot of the search page:

Now remember that Tianjin Sayca Wood Co., Ltd was not blacklisted in the NECIPS database but an inquiry on dishonest blacklisted companies displays 6 records that label  Sayca Wood as a dishonest blacklisted enterprise.

Clicking on the first record shows information about the court ruling, file number, location, jurisdiction, and a case summary. The record shows that Tianjin Sayca Wood failed to comply with a court ruling that ordered the company to pay back a loan of CNY 15,000,000.

Search for information on enforcement by a judgment
The second inquiry category is about information on companies who are subject to enforcement by a judgment. This inquiry turns out 10 records of which 9 of the cases are opened in Tianjin and 1 case opened in Heilongjiang.



Clicking on the first case gives information about the court, date and file number which are important references to dig further into the substance of the case.



Search for information on court rulings
An inquiry about closure of enforcement cases is fruitless so next step is to search for court rulings in the databank China Judgements Online. On this platform, visitors can search for court rulings that covers criminal cases, civil cases, compensation cases and so on. Here is a screenshot of the search page:




An inquiry for records linked to Tianjin Sayca Wood generates 180 results which suggest that the company lawyers must be very busy.

A click on a court ruling record gives access to a full report that can be downloaded. China Judgements Online is a great source to cross-reference and gain more details on findings from inquiries on dishonest companies and companies who are subject to enforcement by judgement. China Judgements Online is also a useful instrument to discover litigation information that is not found from other inquiries on the Enforcement Information Website.

Final note

NECIPS and the Enforcement Information Website with no doubt the best sources for valuable litigation insights on a Chinese company. Conducting a litigation check should always be a high priority component for building a complete profile and evaluation of a Chinese company. The information from NECIPS and the Enforcement Website also works as useful references to dig deeper by adding relevant information disclosed by other government agencies and the media.

Please provide constructive input and comments or get in touch for anything related to cross checking Chinese companies.

Verification of China Custom Registration and Foreign Trade Operator Record

Here I will show you how to verify that a Chinese company is registered with China Customs and Ministry of Commerce (MOFCOM) and why that is important.

Companies that are either exporting or importing from China should always make sure the Chinese buyer or seller has the necessary registrations for international trade. Why is this important? If you are an importer then you want to make sure that Chinese company who is is consignee on the shipping papers actually has permission to export before you wire a down payment. If you are exporting to a Chinese company you want to make sure the Chinese buyer has the necessary permits to receive and clear the goods in China before you ship off your goods against a 30% down payment. (if you request 100% payment before shipping then no need to worry)

Chinese companies that are involved in export/import activities must acquire two important certificates. The first certificate is the China Customs Registration Certificate (中华人民共和国海关报关单位注册登记证书) issued by China Customs and the second certificate is Foreign Trade Operator Record (对外贸易经营者备案登记表) issued by Ministry of Commerce (MOFCOM).  Beside these two certificates, a Chinese import/export company also need to acquire an import/export permit that depends on the goods that must be declared.  However, a Chinese company need to have the China Customs and Foreign Trade Operator certificates before they can apply for an import/export license.  

Earlier this year I worked on a case where a client wanted to check Youlian Industry and Trading Company, a supplier of ethonal fireplaces on Alibaba. (www.yl-life.com or https://yjyl.en.alibaba.com). The agreement said that the client would purchase products from Youlian Industry and Trading Company but the consignor would be the trading company EOS Home Décor Co., Ltd.    The client decided to conduct a background investigation of both companies before taking a final decision. Verifying registration with China Customs and MOFCOM was one of the cornerstones. Here is how I did it.  

First step was to look at the business registration information which is necessary to have in order to apply for Customs Registration Certificate and Foreign Trade Operator Record. See more information about how to check a business license here

1. Business license: 91440106304640568F (Unified Social Credit Number)
2. Company Name: (CN) 广州伊欧斯精品家居有限公司 aka EOS Home Décor Co., Ltd
3. Legal Form: Limited Liability Company (Sole proprietorship)
4. Legal Representative: Guan Rui Ye (关锐烨)
5. Registered Capital: CNY 500,000
6. Establishment: 8th of October 2014
7. Operation Term: N/A
8. Validity: From 8th of October 2014
9. Registrar: Administration of Industry and Commerce Guangzhou, Tianhe District
10. Last Inspection: 17th of May 2016
11. Status: Active
12. Registered Address: Yueken Road, No 94, 2nd Floor, Tianhe District Guangzhou
13. Business scope:
    Wholesale of home decoration items, lamps, interior decoration items, ceramics, glassware, daily utensils, groceries, resin and resin products, household appliances, metal hardware, kitchen equipment and kitchenware, hardware products, furniture.  Import and Export (Except for franchised control products). Retail sales of lamps, ceramics, glassware, glassware, kitchenware, groceries, resin and resin products, hardware and furniture.

2nd step was to confirm if the company is registered with China Customs. Companies that are registered with China Customs can be found on the platform Credit Publicity Platform of Import and Export Business of Customs of the People's Republic of China. http://credit.customs.gov.cn

Any user can search on a company by entering the company name (in Chinese), the organization code or the unified social credit number (on the business license). The platform also host a database for 3 categories of companies:

1. List of companies with a good reputation
2. List of discredited companies
3. List of companies with abnormal behavior

The search on the platform successful identified EOS Home Décor Co., Ltd. Here is the information that was retrieved:

1. Business license: 91440106304640568F (Unified Social Credit Number)
2. China Customs Code: 4401963DYE
3. Registration date: 22nd of September 2015
4. Organization Code: 304640568
5. Company name: 广州伊欧斯精品家居有限公司
6. Registrar: Guangzhou Customs
7. Address: Yueken Road, No 94, 2nd Floor, Tianhe District Guangzhou
8. Administration District: Guangzhou Tianhe District
9. Type of Economic Zone: Normal
10. Business: Consignor and consignee of export and import goods
11. Special Trade Zone: No
12. Industry classification: Wholesale
13. Expiry: 31st of July 2068
14. Cross Border Ecommerce: N/A
15. Status: Normal
16. Annual Report: Done
17. Abnormal credit records: None

Information from China Customs did not trigger any questions. The information corresponds to business registration information and there are no negative remarks about the company.

Next step was to confirm that the company is registered as foreign trade operator with MOFCOM on the website http://iecms.mofcom.gov.cn

There are 3 search options which are:

1. Foreign Trade Operator Record Code (13 digits)
2. Chinese company name
3. Unified Social Credit Code (from business license)

The search shows that EOS Home Décor Co., Ltd is registered as a Foreign Trade Operator and here is the registration data from the database:

1. Import Export Enterprise Code: 4401304640568
2. Unified Social Credit Number: 91440106304640568F Number)
3. Chinese Name: 广州伊欧斯精品家居有限公司
4. English Name: Guangzhou Eos Home Decor CO.,Ltd
5. Registration Place: Guangzhou
6. Legal form: Privately Owned Limited Liability
7. Legal Representative: Guan Rui Ye (关锐烨)
8. Registered Capital: CNY 500,000
9. Last filing date: 2017-03-03
10. First filing date: 2015-09-21

• EOS has a valid registration with China Customs and MOFCOM
• Registration information is consistent with registry information from NECIPS.
• Registration since 2015 and No abnormal records.

Of course, a Chinese company can choose to import or export through an appointed import/export agent with the necessary qualifications and permits. This is often an option for smaller companies that don't have resources to handle all the paper works related to export/import. In that case it is highly recommendable to figure out more about the trading company and make sure that consignee/consignor information is consistent with information on the invoice and the necessary shipping papers/documentation for custom clearance.

How to read and verify a Chinese business license

How to read and verify a Chinese business license

Here is (hopefully) a useful guide for how to read and verify a Chinese business license all by yourself or with help from somebody who knows Chinese. I will use a real case to explain the structure of a Chinese business license, how to read and understand and where and how to search for information that verifies the business license.

Why is it necessary?
I cannot repeat enough how important it is to request a business license copy from any Chinese company that you consider to start a business relationship with and simply walk away from companies that say no. 

The business license is issued by the local branch of State Administration for Industry and Commerce (AIC) and is an important certificate that documents a Chinese company has been incorporated and is a legal entity registered with the authorities. In a perfect world, the business license should assure that a Chinese company is legit and safe to conduct business with. However, it does not require much imagination how a shady (monkey) business easily can falsify a digital copy with some free photo editing software. 

Examples of common forgeries are:

• Use a company name that is not registered in China
• Change establishment date to hide that the company was recently established.
• Change the name of legal representative 
• Increase the amount of registered capital to appear financially stronger
• Increase the term of operation or expiry date
• Make changes to the business scope

Case study Earlier this year, I was asked to examine the background of an interior design and construction company Zhejiang Zhantu Engineering Consulting Co., Ltd. My client was looking to replace their long-term contractor that had been paying kickbacks to one of the company managers who got sacked after the scheme was discovered. Zhejiang Zhantu Engineering Consulting Co., Ltd was on the shortlist of possible candidates and the client wanted a 3rd party investigation to prevent a biased assessment made by an internal team.  

The very first survey component was verification of the business license and to confirm that Zhejiang Zhantu Engineering Consulting Co., Ltd was legit and in operation. Here is a digital image of the business license. Explanation and translation are below the image.

1. Social Credit Unit Code: 913307277045660299. (Note: Before 2016, a Chinese company should register for a separate tax license and organization code certificate. In order to streamline the business registration process and reduce the amount of paperwork, tax number, organization code and business registration number were merged into the social credit unit code.)
2. Chinese company name: Zhejiang Zhantu Engineering Consulting Co., Ltd  ( Note: A company in China is always registered with a Chinese name using Chinese characters. Foreign companies also have to adopt a Chinese name when they incorporate a company in China)
3. Legal entity: Limited Liability (Note: examples of other legal entities are wholly foreign-owned enterprise, join-venture, joint-stock company, sole proprietorship etc)
4. Registered address: Zhejiang Province, Panan County, Anwen Town, Huayue No 211, 12th Floor
5. Legal representative: Zhou Xiao Yuan (In privately owned Chinese companies, the legal representative is often the company owner or majority shareholder)
6. Registered capital: CNY 5 million
7. Incorporation date: 21st of April 2000
8. Operation term: 21st of April 2000 - 20th of April 2030
9. Registered business scope: Cost consulting for engineering construction projects, engineering consulting service, engineering bidding agent service, financial cost forecast for construction and engineering projects, audit and assessment, price evaluation, engineering and construction project evaluation and assessment (See the qualification certificate for details regarding business operation, if the business involves special approvals or licenses, a valid license should be obtained) (For projects that need other approvals, the company should apply to relevant departments before engaging in relevant activities)
10. Registration place: Panan County Administration for Market Regulation

The business license of Zhejiang Zhantu Engineering Consulting Co., Ltd is an image of the Original Business License which comes in the size of a piece of A3 paper. Some companies will send a Business License Copy which you can identify by the two characters  (副本） in brackets. The copy version has the size of a piece of A4 paper and therefore more convenient to scan, copy and carry around. The information on the copy version is precisely the same as the original and the copy version has to a wide extent the same authority a the original. For example, showing the business license copy is widely accepted when you sign a lease contract, apply for foreign staff visa etc.  

How to verify the information

Now it is time to show how to verify that the business license of Zhejiang Zhantu Engineering Consulting Co., Ltd  is genuine and the information is accurate. 

All information about registered companies in China is found in the public available database National Enterprise Credit Information Publicity System  (NECIPS)

In NECIPS, everybody can search for a company by the Chinese company name or by entering the social credit unit code number. When you start a search, the system will ask you to identify the sequence of 3 to 5 Chinese letters. The word puzzle could be a Chinese saying, a title or anything else that makes sense. This is how it looks when you select the wrong sequence.

And this is how it looks when you successfully solved the word puzzle

This is what the search result looks like. If you search with 2 or 3 characters, the search will most likely generate a much longer list of companies.

Clicking on the search result gives access to registration information on the company so you can make a comparison with the business license info. Here is what the NECIPS registry tells about Zhejiang Zhantu Engineering Consulting Co., Ltd:

1. Social Credit Code 
2. Company name  
3. Legal entity 
4. Legal Representative  
5. Registered capital  
6. Incorporation Date 
7. Start of operation  
8. End of operation 
9. Registration Bureau 
10. Inspection Date: 11th of April 2018 - Not displayed on the business license
11. Operation status - In operation - Not displayed on the business license
12. Address 
13. Business scope: Registered business scope: Cost consulting for engineering construction projects, engineering consulting service, engineering bidding agent service, financial cost forecast for construction and engineering projects, audit and assessment, price evaluation, engineering and construction project evaluation and assessment, government procurement agency (See the qualification certificate for details regarding business operation, if the business involves special approvals or licenses, a valid license should be obtained) (For projects that need other approvals, the company should apply to relevant departments before engaging in relevant activities)

The company data in the NECIPS registry corresponds to the information on the business license and there is are no indications that the business license is questionable. The only minor difference is in the business scope where government procurement agency has been added. Government procurement agency is not found on the on the business license that we saw.

There are two records in the registry which are not shown on the business license. The first record is information about inspection date (10). This refers to the last time the company was subject to inspection and verification by the AIC. The next record which is not on the business license is operation status (11). This record shows that a company is active. Other examples of operation status could be, deregistered, license has been revoked, subject to investigations etc.  

The NECIPS database contains more insight about a company which is not found on the business license but can be useful knowledge to have. Example are:

• Information about shareholders and ownership
• Paid-in capital situation
• Management
• Registration changes
• Penalties 
• Remarks by the authorities

Please share and provide constructive comments

Xian Nuolang Trading Co. Ltd

Earlier this year I got introduced to a German manufacturer of woodworking power tools. The reaons was that the German company was in contact with a Chinese company Xian Nuolang Trading Co. Ltd (www.nuolangshangmao.com) that wanted to place a substantial order. The German company was very surprised about the contact in the first place, since EU is their main market but they were thrilled about the opportunity to get business from the Chinese market. Judging from the website, the Chinese company appeared to a be a legit and solid import/export company. However, they wanted a second hand opinion about the Chinese buyer to make sure nothing could go wrong. After a couple of days of background investigation my recommendation was to stay away from China. Here are the reasons and the results of what came up. 

1st Red Flag Red: Confusing but amusing company introduction 

Reading the company introduction on their website told me that these guys had to get rid of their PR manager. Here is the company intro in full length with my comments: 

‘XI'AN NUOLANG TRADING CO.,LTD was established in January 2006, which has a good foreign trade base and is a professional import and export company. The registered capital of our company is 25,000,000 yuan (roughtly 3.6 million USD). Through the continuous efforts, we won the widely trust from the domestic and foreign customers and set up a well-deserved reputation as well as word-of-mouth in the industry.’ Long history of 12 years and capital strong, good reputation - so far so good. Let’s check out the next paragraph.

Our scopes and varieties of products have been expanding on the basis of the importing and exporting mechanicals. Our company mainly engaged in exporting furniture, daily necessity, construction materials, metals, food, drink, wine, condiment and products in other aspects and exported to the EU, South America ,the Middle East, Africa, Southeast Asia and other countries and regions. They mention 8 products and 5 of these products (Furniture, food, drink, wine and condiment) are nowhere to be found in the product list on the website. Not very convincing! 

Product line of Nuolang Trading

\

In 2010 , the Importing amount reached 40,000,000 dollars, which took the leading position in the same industry and had the honor to become the top ten private enterprises in Shaanxi province importing industry – Hold on this going too fast. In the previous paragraph, Nuolang Trading is mainly engaged in exporting but without warning they are one of the biggest importers in the next paragraph. And what is the industry they are referring to? 

Our company actively responded to the call of going out and established the production of motorcycle parts and whole motorcycle factory for assembling. The company has played a positive role and earned a good social benefit in stimulating local people’s standard of living and employment. - This is getting better and better. Nuolang Trading is not only busy with export/import trade but also setting up factories and the CSR awareness is fantastic. The sky is the limit

On the basis of operating the import and export business, our company will march in diversified and industrialized development. We will be adhering to the “to fine sincerity, customer first” service concept and “to cooperate with absolute sincerity, innovation, harmonious development, social returns” company purpose. - For those who are familiar with Chinese communist propaganda, knows that Nuolang Trading could get A plus in CCP rhetoric for this.

 At the same time, the company will provide our customers with high quality and inexpensive products as well as satisfactory service as their mission. To create the best benefits as our principle and to work hardly with great enthusiasm. We sincerely hope that we can work with more friends from all walks of life, and have constructive and win-win cooperation. Yeah Yeah, I finally reached the end and I am not impressed.

2nd Red Flag – Use of free email service providers 

It can be a warning sign when the contact email is from a free email service provider. 163.com is a popular free mail service in China. And what is up with 8 almost similar email addresses?

3rd Red Flag - Delayed news update and unclear business relationship 

Maybe the PR manager is very slow. Xian Nuloang Trading was at an exhibition in May 2017 as a leader company in China but the announcement on the website was made 1 year later in April 2018. 

Another curiosity are the exhibition pictures of ink products from the company Hongto (www.ht-ink.com). A quick check shows that Hongto was established in 2015 with a registered capital of CNY 1 million and the legal representative is Lü Guo Shao. The relationship between Xian Nuolang Trading and Hongto remains unclear and it is very confusing, why Nuolang Trading publishes exhibition news about Hongto. 

4th Red Flag: Highly diversified mix of products 

In general, I am always suspicious when a Chinese trading company with only 2 departments claims to have capacity, knowledge and expertise to sell and source a wide range of unrelated products (+ expertise in setting up factories) 

5th Red Flag: No ICP registration number 

Websites hosted on serves in China must acquire an Internet Content Provider (ICP) license issued by the Ministry of Information and Techology (MIIT). The website must show the ICP file number on the webpage. There is no ICP file number to be found on www.nuolangtrading.com. The example on the left side is from a Chinese webpage with an ICP registration in Shanghai. 

6th Red Flag: Inconsistency with official registration information

In order to verify that the company is legit, I need to know the Chinese company name. A few seconds on the Chinese search engine Baidu.com turned out a job advertisement page (www.jobui.com/company/15107403) where Nuolang Trading is looking for an English translator for a monthly salary of 4000 to 6000 CNY/month (580-870 USD/month). 

The job site shows that Nuolang Trading´s Chinese name is 西安诺朗贸易有限公司 and the business license number is 91610133MA6UQ9X955. 

This information was enough to look up the company in the National Enterprise Credit Information Publicity System (www.gsxt.gov.cn) where I got access to the following information: 

Business Registration number: 91610133MA6UQ9X955 

Company Name: 西安诺朗贸易有限公司 aka Xi'an Nuolang Shang Mao Co., Ltd 

Type of entity: Limited Liability Company 

Registered capital: CNY 3 million (100%) (No registration of paid-in capital) 

Legal representative: Yang Shao Rong (杨少荣) 

Supervisor: Wang Hai Ping (王海平) 

Shareholder: Yang Shao Rong (杨少荣) (100% ownership) 

Establishment Date: 22nd of January 2018 

Registration place: Xian Industry of Commerce Qujiang Branch 

Status: Active 

Registered address: Xian Qujiang New District, Cui Hua Nan Road 0 Jiahe Business Tower, Building 1, Unit 1, 3rd Floor Room 10303 

Registered business scope: Import, Export and sales of goods and technologies such as machinery, agricultural products, woodwork, construction material, interior decoration material, electromechanical equipment, hardware and electrical equipment, Daily use goods, clothing and shoes, textile products, leather products, electrical household appliances, automobile components. Exceptions are import and export of goods and technologies that are prohibited or subject to restrictions. 

On the positive list: 

• The company is a legally registered entry 

• The registered business scope is aligned with the company product list (except for the motorcycle plant history) 

• We know the Chinese company name, business registration number, name of the legal representative. All this information is enough to file a lawsuit against if necessary. 

On the negative list: 

• Very young company that was established in January 2018. The long history starting from 2006 is clearly bull shit (The German company got contacted in April 2018!) 
• The registered capital is 3 million and not 25 million but Capital has not been injected yet. 
• Registered address is not identical with operation address on website. This is not a serious violence but the authorities encourage registered address and operation address to be identical. 
• Import/export of food, drinks, wine and condiments is not mentioned in the business scope (see company introduction section) 
• The business scope does not allow activities that are related to construction or support in setting up plants for motorcycle production (see company introduction part) 

7th Red Flag – No foreign trade qualification or import/export permits 
Since the company is engaged in import and export I checked the company status with China Customs and Foreign Trade Qualification with the Ministry of Commerce. The search did not surprisingly turn out any records. Of course, trading companies without the necessary permits can import/export through a qualified import/export agent but this is not something you would expect from an industry leader with a yearly import worth 40 million USD (see company introduction part) 

8th Red Flag –Identical twin company 

While I was searching for more information on Nuolang Trading I stumbled upon the website of Xian Qing Xian Lv Trading Co., Ltd which immediately caught my attention. Take a look at the Qing Xian Lv company introduction, where did I see this before? 

The contact pages of Qing Xian Lv and Nuolang Trading are also quite similar in nature. Phone numbers and emails are different but there are still a lot of similarities: Department 1 & 2 163.com emails Email address format starts with ‘office’ followed by 3-4 letters @163.com

Just in case you want to get in contact with Nuolang Trading's Department :

+86 2963035040 

+86 2963035041 

MAIL ADDRESSSES 

officesxnl@163.com 

officexanl@163.com 

officennl@163.com 

officenll@163.com 

A check on telephone number 0086-29-61857812 shows the connection between the two companies. 

The similar product line of course 

And they went to the same exhibition – Remember how we were wondering about the exhibition dates and the relationship to Hongto. Guess what, Qing Xian Lv has the exact same news on its company website but the announcement was at least published only 1 month after the event took place in 2017. 

Who is Qing Xian Lv Trading? 
There is no link to a Chinese name and it has not been possible to confirm that the company is legally registered in China. The only reference to the company besides its website is a profile on the B2B platform www.ecer.com , where Qing Xian Lv sells a mix of different products. I guess it is not necessary to repeat the company introduction they use on ecer.com 

A search on the domain name www.qingxuanlv.com shows that the creating date was August 2017 which indicates that the company is relatively young. 

Twitter and the exhibition guy 

On the top of the Qing Xian Lv Trading website there are links to Twitter, Facebook, Google+, Youtube and Skype. Facebook leads to a dead link and there is no information on Google+ and Youtube but the Twitter link leads to a familiar face - the happy smiling exhibition guy who attended the Shanghai APPP Expo according to the news on the Qing Xian Lv website, the same Expo that Xian Nuolang Trading attended. 

On hisTwitter account (twitter.com/PrinterEco), the happy exhibition guy is promoting laser engraving and cutting machines for the company Domax(www.domaxlaser.com). 

More twin companies?: Domax and Qing Xian Lv 

Now the funny (or scary) thing is the Domax webpage looks very similar to the Qing Xian Lv Trading webpage. Here are a couple of examples that illustrate the resemblance. 

Similar frontpage format 

Similar support page format 

Similar exhibition news 

At least the exhibition name and dates are different. On the Domax website, the happy exhibition guy participated at an exhibition in Guangzhou that took place in February 2017 (although the date in the red box says May 19th 2017?). According to the news section on the Qing Xian Lv webpage, the (happy) exhibition guy was at the Shanghai APPP Expo in April 2017. 


The Domax webpage is only in English and there is no reference to a Chinese name which makes it impossible to for information from government sources. However, one thing we can say for sure is that the Domax site was created roughly 4 years before the Qing Xian Lv site. 

Looking through the exhibition pictures on the Domax webpage shows that Domax Laser is linked to the company Suna Laser (www.sunalaser.com) 

The Suna webpage is different from the previous 3 websites. The website is bilingual (English + Chinese) and there is an ICP license. 

Product line resembles the products that Dumax is selling but there is no information about the relationship with Dumax on the Suna webpage. Nor does information from government sources link the Suna management to Dumax, Qing Xian Lv or Nuolang Trading.

SUNA ICP license

Some basic fact about Suna shows that the company is legit: 
Business license number 91410184553153656U 
Registered capital CNY 100,000 (approximately 14,000 USD, extremely low amount that can hardly cover rent and staff salary for year, not to talk about investment in machinery and production equipment. The company is most likely a trading company with some connection to a manufacturing company. 
Establishment date – 2010-03-18 
Legal representative: Jing Hong Tao (敬洪涛 ), majority shareholder, 70% share, CNY 70,000 paid-in capital 2010-03-09 
Supervisor: Wan Jin Ling (万金玲), minority shareholder, 30% share, CNY 30,000 paid-in capital date 2012-12-31 
Operation address and registration address is the same 

The telephone call: 
It was now time to call up Nuolang Trading to confirm a couple of things so I called the company and told them I was the representative of the German company and would like to ask some question about the business deal. I was transferred to a Mr Ren, who confirmed that my information about business license number, address, registered capital and legal representative was correct. When I started to inquire about the connection to Qing Xian Lv, Domax and Suna and the Exhibition guy, Mr Ren denied any knowledge and the call was quickly cut off when I tried to get a comment on the same phone numbers, exhibition pictures and company introduction. The investigation stopped here and the conclusion was pretty clear. 

Final remark
Xian Nuolang’s relationship to Qing Xian Lv is unknown but it is not comforting or convincing that the trails lead to small-sized companies with no trading rights, inconsistent information and lack of proper registrations.

We later learned that Xian Nuolang belongs to the old and famous "Contract Signing Ceremony in China". A Chinese company will pretend to place a very large order and ask the foreign supplier to travel to China to sign the contract. In China, the foreign company is asked to pay for dinners, gifts to the management and expenses for notarization of documents, fees to China Customs etc.