Some Concerns About Sourcing From China.
The following are a list of some of the more common questions people seem to have regarding trading with China. I have sought to answer them as directly and frankly as I can.
Why am I worried about sourcing from or manufacturing in China?
Firstly, if you aren’t concerned, you might as well open your window, set fire to your money, and start shoveling it out of the window into the street. There is risk in anything we do in the world of business, and to think otherwise is to fool oneself into a false sense of security. Moreover, to believe that one can safely self-source from China is equally as absurd and dangerous. Your concerns are valid, as they would be even if you were sourcing from Israel, Portugal, or any other country; and trading or dealing with China is no different. China has its’ own set of cultural and business subtleties and values, to which you as a foreigner or someone unaccustomed to dealing with China, may be totally oblivious to; but to someone such as myself, having lived here for 8 years, are not lost to me. And it is precisely for these reasons that you need someone here you can trust, who is culturally familiar with those nuances of business and social culture, and who can operate in and on your behalf.
What about quality? Isn’t China famous for producing poor quality goods?
That may well have been true at one time. However, you need to ask your self whether you’re happy with the quality of your iPhone? Because Apple have been producing in China for a number of years, along with a plethora of other famous High Street brands. Of course, that isn’t to say that quality doesn’t or can’t suffer. It does, as with anywhere else in the world. However, if you ensure that random quality checking is employed before the goods leave port, then one can drastically mitigate this risk. Furthermore, when once you develop a successful long-term relationship with a manufacturer, they will understand the benefits of not cutting their own throats. To my mind, one of the reasons China has gained its’ reputation for poor quality, is also in part due to a failure of buyers to perform the necessary due diligence and oversight that they should. However, allow me to reiterate a point I’ve just made: Sound partners, and a representative presence in Mainland China, able to perform your due diligence, and maintain an oversight of quality, plus developing your long-term relationship with the producer, will go a long way towards drastically mitigating the issue of poor quality to a level acceptable in the West.
So, how many people will have their fingers in my, production and purchasing, pie in China?
Well, the people, or groups involved could be as few as one, if your goods are coming from one of the larger companies, such as TsingHua TongFang, whom I represent as Agent to Africa, Europe, and North America; or they could be several, for one of the smaller companies. Of course, the amount of fingers in the pie will play a very definite role in the cost of your goods, and sometimes even the quality. However, the role of ‘GuanXi’, or what we would term ‘relationships’, plays a significant role in Chinese society at all levels, and particularly in business; as it has done for several thousand years, and the power of which shouldn’t be ignored or underestimated, and which is an unavoidable necessity and phenomena. This is a deeply ingrained and necessary interpersonal skill, and which is tightly bound and woven into the fabric of the Chinese psyche. I’m sure that should you check your own embassy websites in China you will come across the term ‘GuanXi’ several times. No ‘GuanXi’, no help! It is precisely for this reason, that should you intend doing business in, or with, China, you need a mediator to act as a conduit to facilitate smooth and safe trading. Your conduit can form relationships on your behalf, that you are unable to form due to geographical distance, language, and cultural distance. You scratch my back, and I’ll scratch yours; is precisely how it works in China.
What if my goods aren’t delivered on time or the quality isn’t what I requested?
Well, in that case we incorporate into the contract CIETAC’s model arbitration clause. NOTE: CIETAC (China International Economic and Trade Arbitration Commission (A government department and Part of MOFCOM - The Chinese Ministry of Commerce). Here’s the clause: “Any dispute arising from or in connection with this Contract shall be submitted to China International Economic and Trade Arbitration Commission for arbitration which shall be conducted in accordance with the Commission’s arbitration rules in effect at the time of applying for arbitration. The arbitral award is final and binding upon both parties.” The same clause can be used for the safety of your financial transaction, in addition to opening a Letter of Credit (L/C) rather than a Telegraphic Transfer (TT) of funds. Of course your letter of credit can dictate additional terms before funds are released; these terms can be specifically directed at shipping windows and parameters, levels of acceptable quality, processing of any and all necessary certificates and forms, proper and correct carton and packaging markings, and any necessary Electronic Data Interchange (EDI) Standards compliance. Consequent to which, should the terms not be met as defined in the terms of the contract and in the letter of credit, then it will be up to you to decide or determine whether the funds be made available to the seller. So, that’s it for today. Safe Trading!
Related articles by Zemanta
- No joke (news.bbc.co.uk)
- German exports to China up 7 pct in 2009 (sfgate.com)
- Iron Ore: China Likely to Pay a Premium (seekingalpha.com)
- “China Retaliates: Ministry Of Commerce Says US Should Not Seek To Boost Exports By Forcing Others To Appreciate Their Currencies” and related posts (zerohedge.com)
- Five Things About Doing China Deals That Are Different From The West. Aspiration Matters. (chinalawblog.com)
Originally posted 2009-08-13 01:10:36. Republished by Blog Post Promoter
Popularity: 7%
Some Related Websites - Web Traffic - Myth And Glory Promising “strategies” and using “secret” methods to attract website traffic or, to increase website traffic by online marketing agencies, is by no means a guarantor of success to your business. As simple as that! This is just a myth. While it has become a necessity rather than an option to......
- Visit India: The UN-Official Guide [/caption] India Country Guide India is a mystical land that presents the traveller with a bamboozling array of unforgettable experiences. Hinduism, the prominent religion, is intimately woven into the fabric of everyday life, reflected in an extraordinary range of time-honoured traditions. Apart from its ancient spiritual framework, India's vastness also......
- How To Find A Good Business Mentor - The Truth About Guru's Finding a good business mentor can be hard with so many people coming online offering to "help" you. Being a teacher takes more than just directing someone to a website link. You have to actually care about the person you are trying to help. Image via Wikipedia One of the......
- Invest Your Money- Not Your Emotions Investing in your future is one of the best financial moves you can make. There is no argument that money well invested will serve you much better over time than the same cash equivalent placed in a traditional savings account or worse yet in a cookie jar. With that in......
- Best Internet Business - Six Of The Best Online Business Ideas These days almost everybody wants to work on the internet from home. Working on the net is the ideal thing for moms who want to stay at home and take care of children or entrepreneur who want to have a business of their own with a good income. Internet is......
![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_e.png?x-id=3096843b-ce41-4a0f-b275-18dd917324d8)

![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_e.png?x-id=71eba0e7-a81e-4f4d-8f09-5cfcb6688f71)
![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_e.png?x-id=8f92256d-5e84-4544-b072-6ec893659364)
![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_e.png?x-id=5a538fec-a14d-42b1-92ca-d2b307340a7e)





