Work with China # 5: 14 points on doing business

In one of the past posts ( Work with China # 3 ) quite a few readers voted to learn as much as possible about doing business in the Middle Kingdom. I have not forgotten about it, and for almost a month I thought in what form it is better to implement. In the end, I came to the conclusion that I would form a small list of 14 points, with the basic rules and approaches for everyone. Enjoy learning!

PS: Many thanks to the experts from HotTelecom and 898Tele for the comments made.
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1. To sign any, even a small contract, you need a presence in China. The conclusion of distance contracts, as is the case with counterparties from Europe or the United States, is fraught with loss of money due to the high level of fraud.

2. It is advisable to have a manager and a quality control specialist at the place of fulfillment of obligations. If there is no such possibility - enter into an agreement with an intermediary from the CIS and the implementation of such services.

3. Always check the history of counterparties. With a new company or a company in whose history losses are seen, the prepaid work is “ordered.”

4. In order must be not only documents, but also physical addresses. If the Chinese counterparty refuses to show the factory, office, warehouses with the goods, referring to some problems, in 70% of cases these are second-hand dealers. High probability of scam.

5. The minimum prepayment amount for starting work with China ranges from $ 15-45k. To stipulate amounts larger than this does not make any sense at the initial stage, since in the case of unscrupulous counterparties, this amount is already enough for the “partner” to commit fraud.

6. The classical scheme of fraud by Chinese counterparties - the products of the chemical industry. The quality of chemicals and applied plastics is difficult to verify.

7. The contract for the Chinese side is not a clear, but a rough plan of action. Anything that is not specified and not painted to the smallest detail is not necessarily enforceable.

A bad example: “The batch of phones should have Russian localization.”

A good example: “There should be Russian-language localization in the batch of phones. The base for translation is the Dal dictionary. Support for X, Y, Z encodings. Verification of translation work is carried out by organization M, in accordance with the procedure established in clauses 14, 28 and 198, of the L agreement. In case of discrepancies, conditions C occur.

8. During negotiations, the Chinese side can easily switch to their native language. Always stipulate the conditions of communication and be sure to take a translator with you during live communication.

9. The Chinese side considers it quite normal attempts to manipulate local representatives of your company. For this purpose, organized "massage evening", gifts, etc. actions to collect dirt.

10. Any technology, the description of which is attached to the contract, in 98% of cases will be copied for third-party use. Be ready for this. The same goes for the brand. An example of such a case was described by me here .

11. When drafting a contract, try to avoid several languages. If this has already happened:

Specify which version prevails (for example: in English);
Be sure to check the accuracy of the translation. There are often situations when the Chinese side spits absolutely calmly on the English and Russian-language copies, focusing on the copy made in Chinese, with all the consequences.

12. Pay attention to the wording "prepayment" and "deposit". According to the norms of Chinese legislation, the deposit is not subject to return to the party who paid it in case of its refusal to perform the contract.

13. Getting started with China, the easiest way to carry out is through Hong Kong. Its advantage as a jurisdiction for the registration of international trading companies is the absence of VAT.

14. If you doubt the feasibility of opening a local office from the start, the easiest way is to start from a “virtual” / cloud office. About who provides such services, described here .

Previous articles on this topic

Work with China # 4: Top 9 Providers of China Virtual Numbers
Work with China # 3: What aspects should be taken into account in the name of the site when promoting in the Chinese market.
Working with China # 2: Top 5 best VPN clients for working with the Chinese network.
Working with China # 1: How to register with Baidu Webmaster tools.
Introduction of IT products to the Chinese market - marketing diary

Work with China # 5: 14 points on doing business

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