The three biggest Chinese business scams that target foreign firms

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Honorable Mention: Bain Capital.


I work for a Chinese company and there is almost no trust between companies in China. Which makes sourcing services, materials, and parts from the USA an adventure.

In the USA, it’s easy to buy things. You ask how much it is (ask for a quote), US company sends price (a quote), you ask to buy a quantity to be delivered (Purchase Order), they agree and send you the stuff (and invoice), you pay. Not much different than buying from Amazon. And almost as fast.

Compare that to a recent purchase we made from the USA that took almost 4 months.

Getting quotes is easy. So my collegues keep asking for more, and changes, and about taxes, and delivery, and on and on. Guys, ask that up front!

Then they ask for a contract, stamped with the company stamp. In China, signatures are not as important. But whoever is physically holding the company stamp controls everything. Bank accounts, contracts, everything. Every US company goes “WTF?” The Purchase Order is the contract (created by the buyer) and almost no on has a company stamp.

Simultaneously the Chinese company starts negotiating on payment terms. They are familiar with payment before shipping, but try to get it to 1/2 down. US companies are willing to wait 30 days after shipment if you have good credit (but Chinese companies don’t have US credit histories). So both companies are confused. Bit of advice for US companies: get at least 1/2 down. It’s considered reasonable in China and it’s good protection.

Oh, and, there are currency controls, so Chinese companies need all sorts of paperwork to get money out of China to buy anything. Everyone forgets this until time to pay.

Oh, and the guy who needs approve this or that what’s more information. Like, can you get more quotes? WTF!

Then it goes to Finance, which likes to repeat half the work.

Sorry folks. I’m venting. But if you ever wonder why the US buys more stuff from China than they do from us, here’s part of the answer. They don’t know what we have for sale, and we don’t know how to sell it to them.


This is exactly what Trump was talking about when he asked China to investigate Hunter Biden. Vindication!

This is a feature, not a bug. All the bureaucractic hurdles imposed on the Chinese side are designed to create this effect.


We do business with a company in Taiwan, and I will just say that our bank does not want to wire money there. We needed to pay for a small order last week, it very much seemed like the banker was going to call Financial Protective Services and have my money put in a foster home.

I recognize that Taiwan and China are different on so many levels, but I also recognize that in the 1940s some very crooked people from mainland China relocated en masse to Taiwan, and I wonder what the residual effect is in 2019.


3 Biggest Chinese business scam…, and 1,000 smallest one awaiting from you there.
After about 20 years there, I’m still surprise to discover new ways and excuses to (try to) trick you…


No, the currency controls are designed to stymie buying from the US. I’m referring to how poorly we market ourselves in China.

Think of the sterotypical Chinese importer here. Some dude with a warehouse that has many contacts in China, buys stuff from there, and finds customers for it in the USA. The opposite barely exists. Nor does the more contemporary middleman who doesn’t bother with a warehouse and just makes a living putting two companies together and smoothing out the buying process.

Or search engines. Chinese merchants put up web pages in English that get indexed. We find stuff on Amazon, Google, etc. Americans don’t create web pages in Chinese, and they can’t us Google. So Baidu only shows them Chinese suppliers. And when they do find a company here, the purchasing system mismatch discourages them.

Yeah, lot’s to blame on China for the trade imbalance. But we could and should step up our game.


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