Be careful with whom you conduct business!
Doing business domestically or internationally always carries a risk, however in the case of China this risk seems higher. Unfortunately we have seen and experienced frequent fraudulent attempts and scam attempts. Products which are delivered late, containers filled with bricks instead of the actual product or products of a lower quality are just some examples. When trading with China you’ll want to limit these risks as much as possible.
Scams most often occur when payment is made up front to the Chinese dealer. Goods often are delivered on time, but aren’t conform the quality as contracted and paid for. Many scams are performed by middlemen who often don’t work for the company and disappear as soon as the money arrives.
Limit your risk
In the euphoria of an amazing deal, basic steps are often skipped to get straight to the point. These basic steps are very important to limit your risk, some of them include:
- Verify the official company documents of your business partner;
- Set up a contract on which Chinese law applies;
- Know who can make decisions and who is authorized to sign contracts;
- Cooperate with a local intermediary when you can’t be present;
- All important documents have to be chopped with the Chinese company seal;
- Register your brand in English and Chinese.
When things go wrong
It’s very tedious when things go wrong, but luckily not all is lost. However, if you threaten to go to the police or court then the Chinese company will most likely break all communications. Next to that you won’t win most cases in Chinese court and the police won’t assist you if you don’t have a complete file with all original documents. We know from experience that mediating is often the best solution to solve a dispute. The Dutch Chinese Chamber of Commerce can help you mediate and try to find a suitable solution for your dispute.
