At LSR we’ve often heard it said that gaining access to official Chinese company data is either very difficult or illegal and that the information itself cannot be relied upon. Frankly, this is very far from the truth and a whole host of information is available, direct from reliable government sources, if you know where to look and who to ask.
Just like any other sophisticated, 21st century country, China has upgraded and evolved its regulatory framework to keep pace with growth and to support trade.
So, what can you get?
Company registries certainly cover the basics that can verify the Company Name, Company Number, Registered Address, Company Type (private, SOE, Public etc), the Legal Representative (akin to an authorized person who can speak and act for the company itself), Shareholders (just the name directly but further investigation can reveal shareholding percentages) and Directors. The company’s status is also highlighted if “abnormal”. An abnormal status may result from non-payment of annual fee or late filing of required documentation.
Furthermore, a timeline of changes to significant elements of the company will also be documented, such as changes in capital or the resignation and appointment of Directors and Legal Representatives. Another detail that may be included is the recording of court-appointed administration over shares.
The availability of these details is very much comparable to any developed nation and actually better than many.
Over recent years there has been movement with regards to the provision of financial statements and these are becoming more accessible, with yearly, quarterly and even monthly unaudited statements available. Occasionally companies even release detailed fixed asset registers, even providing the license plate numbers of vehicles!
Moving on from the purely corporate, legal searches for judgments and defaults can be accessed on a routine basis. As is common in most parts of the world, a list or details of on-going cases are not normally available, but adjudicated cases are listed, with both parties named, the decision and the award made. This information, coupled with a register of defaults against awards, can be illuminating and detailed.
For those wishing to unlock the trading profile of importers and exporters it is now possible to access customs data for Chinese companies trading internationally. Although coverage may not be 100%, and the names of foreign parties are not disclosed, it is possible to build up a revealing picture of the ebb and flow of goods handled by local companies as a description, weights and timing of trades is covered in adequate detail.
The bottom line is that administering China is a vast undertaking as the country continues to expand its economy, no matter what economic and trade restrictions are thrown its way. In 2016 the State Administration for Industry and Commerce announced that there were over 77 million companies of various types in China, with 12,000 being formed every single day. Contrast that with about 30 million in the USA at the last census. It’s little wonder that China has to keep a tight regulatory reporting structure, if only to keep a grip on tax collection.
Accessibility to basic details of who you’re dealing with is essential to business confidence, which itself is essential to continued growth.