Visiting a Chinese Factory Before Your First Order? Sign the NNN First, Then Match Four Names

Sign an NNN with the factory itself, under its registered Chinese name and company chop, before you show drawings or unreleased samples on site. On the floor, check that four names match: the name on the gate, the business licence on the wall, the party on your contract and the company that will receive your money. Then write what you saw into the contract: the production address, a ban on moving the main work elsewhere without your written consent (Civil Code art. 772) and your right to inspect (art. 779). If you only have time for one thing, do the name check, because a mismatch there decides who you can hold to the contract.

The invitation usually comes after the second round of samples. Come and see the factory. Buyers take it as a sign of good faith, and often it is. The trouble is what a visit leaves behind: a few photos, a business card, a good feeling, and no paper that ties the company you met to the order you are about to place.

What does a factory visit actually prove?

It proves that a production line exists at a certain address on the day you were there. It does not prove that the company on your contract owns that line, that your order will be made on it, or that the people who showed you around are employed by the company that will take your deposit.

A common pattern is a sales manager who meets you at the station, walks you through a workshop that belongs to a related company, and later sends a proforma invoice from a third entity with a bank account in yet another name. Nobody needs to be dishonest for this to happen. Groups split production, sales and export into separate companies for tax and licensing reasons. What matters to you is that each of those companies is a separate legal person, and only the ones that sign your documents owe you anything under them.

Our view is that you should treat the visit as evidence gathering. Reassurance is a by-product.

What to sign before you go

Sign the NNN before the visit, and sign it with the company that runs the line, not only with the trading desk or the salesperson. NNN stands for non-disclosure, non-use and non-circumvention: the factory may not reveal your designs, may not use them for anyone else and may not go around you to your customers. Have it signed by the legal representative or an authorised signatory and sealed with the company chop, the round red seal that binds a Chinese company.

Buyers sometimes ask whether Chinese law already protects what they show during negotiations. It does, up to a point. Article 501 of the Civil Code says that trade secrets and other confidential information learned while a contract is being negotiated may not be disclosed or improperly used, whether or not a contract is ever signed, and that a party who does so must compensate the loss. In practice you would have to prove what you showed, that it was confidential, how it was misused and what you lost. An NNN replaces most of that with agreed definitions, agreed liquidated damages and an agreed Chinese court. Our article on NNN agreements with Chinese factories covers the drafting.

If the factory will not sign before you arrive, go anyway, but leave the full CAD files and the prototype at home. Bring what you need to discuss price and capability. A refusal is information too.

The four names to match on the floor

The single most useful thing you can do on site takes ten minutes. Photograph four names and compare them.

The first is the company name on the gate or the building. The second is the business licence, which Chinese companies usually display in the office; photograph it and note the 18-digit unified social credit code and the legal representative. The third is the party named on the contract or purchase order you are about to sign. The fourth is the payee on the proforma invoice and the name on the bank account.

If all four match, you have a factory that is contracting and getting paid in its own name. If they do not, that is not automatically a reason to walk away. A trading company in front of a good factory can work well. It does mean the contract has to reach the factory that holds your drawings and molds, which we explain in contracting through a trading company. And if the payee is a fourth company or a personal account, stop and get that explained in writing before anything is paid.

One published case: liability stays with the company you signed with

The Supreme People's Court published a case in March 2025 that shows how this plays out when the company you contract with hands the work to someone else. It concerns a warehouse rather than a factory, but the rule is the same one you rely on when the factory you visited is not the one doing the work.

A cross-border seller based in Heilongjiang sold silk pillowcases on Amazon in Germany. When its listings were removed, Amazon would only return the stock to an address in Germany. The seller hired a company in Suzhou to receive 1,936 returned items there and ship them back to China. The Suzhou company had no warehouse in Germany. It passed the job to a local German warehouse operator, which lost 581 of the items. The seller sued the Suzhou company for RMB 75,526.12.

The Suzhou Intermediate People's Court held the Suzhou company liable ((2022) Su 05 Min Chu No. 381). The seller had Amazon's return records, Amazon's emails confirming receipt, courier tracking and WeChat messages between the Suzhou company and the German warehouse. Read together, they showed that all 1,936 items had arrived and been signed for. The Suzhou company could not show it had returned them. The court awarded RMB 42,840.08, taking into account the goods' value, more than a year of depreciation in storage, and the storage and freight charges the seller owed on the items that did come back. Neither side appealed.

Two points carry over directly to a factory visit. The seller sued the company it had a contract with, not the warehouse that lost the goods; under article 593 of the Civil Code, a party whose breach is caused by a third party is still liable to its counterparty, and settles with the third party separately. And the seller won because of its paper trail. A buyer with photos of the gate, the licence and the line, plus emails confirming what was promised, is in the same position.

What an overseas buyer should take from this

Contract with a company you can collect from. The factory you toured owes you nothing in contract unless it signed something. If the seller is a related trading company, bring the factory in as a party, or have it sign the NNN and a mold confirmation letter in its own name.

Write the visited address into the contract as the production site. Where an order is made to your own drawings, a Chinese court will often treat it as a work contract (承攬合同, a contract to make something to the customer's order) rather than a plain sale. Under article 772, the maker must then do the main work with its own equipment, technology and labour unless agreed otherwise, answers for any third party it hands the main work to, and without your consent you may terminate. Article 773 lets it subcontract auxiliary work, again answering for the result. The classification is not automatic and the label on your contract does not settle it, so put the rule in the contract yourself: named address, no transfer of the main work without your written consent, and termination plus damages if it happens.

Keep the right to come back. Article 779 says the maker must accept the customer's necessary supervision and inspection during the work, provided the inspection does not disrupt normal production. Spell out notice, access for your QC firm and what happens if access is refused.

Repeat the confidentiality terms in the manufacturing contract. Article 785 requires the maker to keep the customer's secrets and not to keep copies or technical materials without permission. That helps, but the NNN with agreed damages is still the stronger tool.

Send a short email the same day summarising what you were told, and ask your contact to confirm it. Who will run your order, on which line, where the molds will be made and stored. A confirmed email is evidence; a memory of a conversation in the showroom is not.

A factory visit checklist

• Before you fly: NNN signed by the factory's registered Chinese company and sealed with its chop; you hold its full Chinese name and unified social credit code.
• Before you fly: ask in writing for the address where your product will be made.
• At the gate: photograph the company name on the gate or building.
• In the office: photograph the business licence; note the credit code and the legal representative.
• On the line: ask whether your order will be made here or elsewhere, and by which company; write the answer down.
• Molds: ask which company will make them and where they will be stored.
• Paperwork: compare the company on the proforma invoice and the bank account with the licence.
• Same day: email a summary of what you were told and ask for confirmation.

Sources

• Supreme People's Court, second batch of typical cases on serving the pilot free trade zones, case 4: Heilongjiang company v. Suzhou company, contract dispute, Suzhou Intermediate People's Court (2022) Su 05 Min Chu No. 381; published 18 March 2025, court.gov.cn/zixun/xiangqing/459481.html
• Civil Code of the PRC, articles 501, 593, 772, 773, 779 and 785 (adopted 28 May 2020, effective 1 January 2021), as published in the Gazette of the Supreme People's Court, gongbao.court.gov.cn
• Translations are mine and unofficial.

Frequently asked questions

• Do I need a lawyer with me on the factory visit? Usually not. What protects you is the paperwork before the visit, the NNN, and after it, the contract terms and the confirming email.
• The factory will not sign an NNN before my visit. Should I still go? You can, but leave the full drawings and unreleased samples at home and discuss only what price and capability require.
• Is a third-party factory audit worth paying for? For large or tooling-heavy orders, yes. An audit checks capacity and quality systems; it does not tell you which company you can sue, which is what the legal check is for.
• Can I sue the factory I visited if my contract is with a trading company? Usually not in contract. The factory is liable to you only if it signed something with you, such as an NNN, a mold confirmation letter or a guarantee.

Related service: Supplier Background Checks ↗

Related Reading

• Is Your Chinese Supplier a Real Factory or a Trading Company? How to Check Before You Pay
• NNN Agreements in China: How to Stop Your Chinese Factory from Copying or Selling Your Product
• Your Chinese Supplier Is a Trading Company: How to Make the Contract Reach the Factory

This article is general information on PRC law as of 24 October 2026 and does not constitute legal advice. The answer in any matter depends on its documents and facts.