If you have a small or medium business and are keen to import from China, be careful before choosing a Chinese exporter from the lists posted on the B2B portals.
For, these Chinese companies might go incommunicado without sending the consignment once you succumb to its insistence on advance payment of a percentage of the total cost.
Or, even if the Chinese company responds to your repeated correspondences, it might ask you to send an additional amount claiming that the cost of the raw materials went up as you delayed payment of the advance. You run the risk of losing either the initial advance payment if you do not pay more or the entire amount if you do.
This is just one of the many ways Chinese companies dupe unsuspecting businessmen from India. The Embassy of India in Beijing listed some of those ingenious Chinese ways to trick Indians and issued an advisory along with some do’s and don’ts.
The kidnapping of the two Indians by the local traders in the commodity market of Yiwu in Zhejiang province of China has just brought the focus back on the risks that doing business with the communist country is fraught with. An Indian diplomat, who had gone to help them, fainted and had to be hospitalised on December 31 last. New Delhi on Monday lodged protests with Beijing.
The Indian Embassy in Beijing received as many as 66 complaints from Indian companies about fraudulent activities by their Chinese counterparts between January and mid-July last year. The amount involved in those cases of trade disputes was about $1882119 in the first half of 2011.
Most of the cases of trade disputes reported to the Indian Embassy in Beijing originated from the provinces of Hebei and the municipality of Tianjin. The amounts involved in the trade disputes between Indian and Chinese companies in 2009 and 2010 were $78,43,000 and $ 54,01,914 respectively.
Indian companies are sometimes contacted by the Chinese firms and invited to visit their facilities in China. Citing Chinese cultural values, Indian companies’ executives are asked to bring gifts and cash for their counterparts and hosts in China.
The Indian companies are promised of excellent cooperation by the Chinese. After the Indian companies’ representatives are back to India, the Chinese companies go silent and stop replying to the Indian companies’ communications.
The Indian company ends up losing cost on transportation, accommodation and the amount incurred for expenditure towards gifts.
Sometimes Indian company is instructed by an employee of its Chinese counterpart to send advance payments to a bank account, which is different from the one mentioned earlier.