Factory workers on a textile production assembly line

On October 1, 2025, China enacted the most significant overhaul of its export compliance and customs regime in years. The changes are sweeping, and for overseas buyers who rely on trading companies or informal export arrangements, they represent a structural shift that requires immediate attention.

The short version: China's grey-trade export model is over. Here's what that means and what you need to do.

What Changed: The End of the Trading Company Model

For decades, a common practice in Chinese export trade was for manufacturers — particularly smaller ones without their own export licences — to ship goods under the name of a third-party trading company. The trading company would appear on all customs documentation, effectively masking the real manufacturer from the record.

This arrangement was widely tolerated and commercially convenient. It allowed small factories to export without maintaining their own compliance infrastructure, and it gave trading companies a revenue stream for essentially renting their export credentials.

The new regulations end this. According to LexChina's analysis, all exporters and importers must now:

Key point: Using an unrelated company's name or licence to declare exports is no longer permitted. Factories that previously exported under trading company credentials must now either obtain their own export registration or work through a compliant agent who correctly lists them as the entrusting party. (Source: CI Process)

Why China Made These Changes

The driver is primarily tax compliance. VAT export refunds — a significant financial incentive for Chinese exporters — were being claimed on goods that didn't have a verifiable paper trail back to the actual manufacturer. The new system creates that paper trail by requiring real-name declaration at every step.

There is also a supply chain transparency dimension. Regulators, trade partners, and international compliance frameworks increasingly require the ability to trace goods back to their origin. The old trading company model made that impossible for a significant portion of Chinese exports.

What This Means for Overseas Buyers

If you buy from Chinese factories through intermediaries — trading companies, sourcing platforms, or agents who don't clearly disclose the manufacturer — this change affects you in several ways:

1. Your documentation will change

Commercial invoices, packing lists, and customs declarations should now clearly show the actual manufacturer's name and registration details. If you're receiving documentation that still lists a generic trading company with no manufacturer reference, your supplier may be operating non-compliantly — which creates risk for you at import.

2. VAT refund processing may slow down

The new verification requirements mean VAT refund claims take longer to process for suppliers whose documentation isn't clean. Some suppliers may try to pass this delay cost on to buyers through price adjustments. Ask your suppliers directly whether their export documentation is now compliant with the October 2025 regulations.

3. Supply chain transparency improves (a good thing)

For buyers who have always wanted to know exactly which factory makes their products — and many do, for due diligence, sustainability reporting, or brand protection reasons — the new regulations make this easier to establish and verify. A supplier who is now fully registered and exporting under their own name is, by definition, more traceable.

4. Some smaller manufacturers may have temporarily disrupted supply

Factories that previously relied entirely on trading company credentials to export needed to either register independently or find a compliant export agent arrangement. Not all of them completed this transition before October 1. If you work with smaller Chinese factories, it's worth confirming with them that their export arrangements are now in order.

Hand marking items off a compliance checklist

Five items buyers should now verify with every Chinese supplier — documentation compliance can't be assumed, it has to be confirmed.

Not sure if your supplier is compliant?

I verify export compliance as part of every supplier check

Since the October 2025 overhaul, documentation errors have caused real shipment delays. I check registration status, invoice accuracy, and packing list consistency before anything ships. Ask me to review your current supplier.

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A Practical Checklist for Buyers

Our View

From a buyer's perspective, these regulations are ultimately a positive development. More transparency in the supply chain means fewer surprises — you know who's actually making your goods, the documentation is cleaner, and the risk of compliance issues at your import destination is reduced.

The transition period will involve some friction, particularly for buyers working with smaller factories or informal intermediaries. But the direction is right: a more traceable, accountable Chinese export ecosystem is better for everyone who depends on it.

Not Sure If Your Suppliers Are Compliant?

We work directly with registered manufacturers in China and can help you verify your supply chain's compliance with the 2025 export regulations. Get in touch.

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