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Is Fraudulent Trade with Chinese Companies Rather Common?

When doing business with Chinese companies, it is wise to be cautious in order to avoid any fraudulent activity on the part of the company in China. However, it is also expedient to be sure that any disagreements you may have with the company is due to fraud. There are times when language problems as well as cultural problems create misunderstandings between the two parties involved in a transaction.

There are a number of complaint letters on the Internet from western companies which have had significant problems with their Chinese business attempts. Since those letters are from western businessmen, we read only one side of the disagreements.

Some of the letters of complaint involve the western businessman having sent some money before actually receiving the products they had ordered. The Chinese producer often had asked for some up-front money in order to buy materials to produce the items ordered. Generally, if one has not previously dealt with a particular Chinese manufacturer, he should be cautiously suspicious about sending money before seeing the products.

Of course, sometimes the manufacturer in China actually needs some pre-payment of a portion of the costs he will encounter. After all, he should not be expected to take all of the risk involved, using his own money and sending items he manufactured to a stranger in another country.

On the other hand, western business intends to avoid being defrauded by a Chinese business. There are a number of schemes which some Chinese businessmen use to defraud western businesses which use the Chinese companies as outsource suppliers. Sometimes, it exists in poor production quality of the items. At other times, the up-front money is kept, but no products are ever sent to the businesses that provided the pre-payment.

Because of frequently-occurring problems with products manufactured in China, there are particular expectations of less-than-high quality in such areas as leaded paint or unhygienic water being used in products which could be ingested by children in the western country. Such situations should be handled when granting a contract to a Chinese firm. The quality of the products should be spelled out so directly that the Chinese company has no choice but to use quality materials which will not be rejected by the western firm.

One area which can be considered fraudulent includes companies with fake names in China. They are there to accept your prepayments but then disappear when they receive the money. The better way to protect your company from fake name companies is to do some research before contracting with them. Get evidence from a search as to whether the company is real. It is wise to get credit information on a company before doing business with it.

Payment risk can be reduced by getting a letter of credit before sending any prepayments. Try to find the name of the real owners of a business before sending money before the shipment is received from China. One sign that should cause you to doubt a company is when the owner asks for an emergency payment. If he seems more concerned about the money than the contract, it is wise to have doubts about him.

One common scam which is found in many countries, not only in China, is the suggestion that you send them cash when they send you a cheque. There is a strong possibility that the cheque is not legal tender.

To be more sure of the quality of any products one intends to order, a good practice is to ask for a sample of what the Chinese producer will manufacture for you. Even then, it is wise to not pay for the products before they are checked for quality upon arrival. The products should be equal to the samples that had been sent earlier.

Of course, outsourcing involves a savings on the cost of manufacturing the goods you will be buying. However, one should always be quite suspicious of very low-priced offers. There are limits to what one should expect for his expenditures. If a Chinese producer offers products at prices which are much too low, it could be a sign that he intends to defraud your company.

The old adage that 'if something seems too good to be true, it probably is' should always be kept forefront when doing outsourcing business in China. Working with www.china-suppliers-manufacturers.com helps reduce the probability of fraud. Expressing exactly what you need with all of the details can help to locate a Chinese manufacturer to work with. This includes the delivery time, exact details of the product, how many and the quality of work expected. www.china-suppliers-manufacturers.com is ready to assist in finding the best manufacturer in the country for your own particular needs.

Even after you have begun dealing with a manufacturer from www.china-suppliers-manufacturers.com, it is advisable to stay in touch regularly with the company you chose to produce your items. Check that the price has not changed, that no major personnel changes have taken place and that the quality expectation is still realistic.

Although a western company has rights within his own country, taking care in protecting his logos and copyrights can help in case any infringement takes place concerning the Chinese manufacturer.

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