How to increase the security of import from China? Interview with Mariola Bańdo-Szwaj, an expert in trade security with China.
How do you assess the current knowledge of importers about foreign trade and especially the specifics of trade with China?
– Many importers face problems related to trade with Chinese companies without realizing that some of these problems are the result of lack of knowledge and experience of the buyers themselves. The importer should know the rules of foreign trade, negotiate with the supplier individual elements of the transaction without leaving anything without agreement and confirmation. The Chinese side usually proposes delivery terms and the most favorable payments for itself, but it is open to negotiations. An experienced importer knows what conditions can be negotiated with the supplier so that both parties are satisfied with the transaction and the cooperation lasted for many years.
So the knowledge of the specificity of trade with China and the ability to conduct negotiations are, in your opinion, the key to making imports successful?
– Yes. It is very important. We always negotiate with a Chinese supplier. Each time we evaluate the received offer in terms of its veracity (whether the supplier is able to process the order), whether all the elements of the transaction correspond to us and have been confirmed by the supplier. The description of the goods received from the new supplier is rarely entirely true. It is only in the course of conversations that the product actually offers the supplier. Also, do not forget that surprises can occur in any transaction, even if you have been buying from the same supplier for years.
Do importers realize that it is worth checking the supplier before placing an order?
– It is very puzzling that having only contact by e-mail and telephone to the supplier, a large group of buyers treats every statement as true. Importers give suppliers immense confidence practically knowing nothing about them; they entrust their money, sometimes really substantial, to Chinese companies without even being sure that these companies really exist. It sounds unbelievable, but it is so. Polish companies apply to us, asking how they can recover money from a supplier who has disappeared after receiving payment for the goods. Unfortunately, it is already too late to help, because it turns out that the deceived importers do not know the Chinese supplier’s registration name or address, they corresponded with the person who only introduced the assumed English name, and her e-mail was not even corporate, but registered on the public domain.
How can you check if a given Chinese company really exists?
– When contacting a new supplier, you must ask for a Business License scan. It is true that we are not sure if the person with whom we correspond really works in the company indicated in the received document, but it is always something. With such a document, we can check the registration information of this company. Still, we do not know who we are on the other side and whether the supplier is able to fulfill our order. It can be a beginner, with no experience in the industry, no knowledge. It also happens that the factory does not produce the goods we are interested in or uses a different technology.
To make sure that the provider really exists and is competent, it is checked by carrying out the “local vision”.
What is it about?
– “Local Vision” consists not only in checking the company’s data in the relevant Chinese register, but it is connected with the visit of the inspector at the supplier, i.e. we check the supplier in a complete manner. What about the fact that we will find out that a Chinese company is registered if we do not check whether it is actually a business partner appropriate for us, whether it is a trade or production company, whether it produces goods that it has on offer, or has an appropriate quality control system implemented and the person we correspond with is an employee of this company. The inspector has the ability to compare scans of documents with originals, verify if the factory really exists, i.e. whether it is a fictitious company.
We recommend “WIZJA Lokalnego” also to exporters, companies planning to sell their products to the Chinese market. Unfortunately, it often turns out that the buyer is a cheater.
Importantly, the “Local VISION” takes place with the consent of the supplier. If the supplier does not agree to the inspector’s visit or disappears, it means that he is not what he is given for and he did not intend to execute the order. Chinese suppliers show their company without a problem and the importer is to assess whether to establish cooperation with this supplier or not.
Do importers realize how important it is to carry out product quality control in China?
– Not everyone, although their awareness is growing. There are several types of controls, most of which are pre-shipment control and supervision of loading into accounts