China Business Blog (ABL) - Bridge to Asia Law

The content of the China Business Blog is intended to serve as general information about China law and business; it is not legal advice nor intended as legal advice

Middlemen Series - Be explicit that there eventually may be a production location audit

Be explicit that there eventually may be a production location audit

November 23, 2020

When speaking about a production location audit, it is assumed that the building and facilities, management staff, factory workers, production, warehouse and storage, quality, and product development are all covered on gathering good information. In China, factory audits are not a legal requirement but is required if you really want to manage the risks. Why should you be explicit that the production location audit may be coming? Also, need to talk about this issue of showcase factory.  Be explicit that…

Why do the scam artists target small scale foreign buyers?

Why do the scam artists target small scale foreign buyers?

November 16, 2020

Let’s talk about why the scam artists target the small scale foreign buyers.  It’s pretty simple. They’re easy to find. There’re so many buyers online: eBay power sellers, people that have a small eBay store, or some online store back home and they buy ten units of this, 20 units of that.  There’re so many people doing that on the side, and many of them think “Okay, let’s go directly to China and get a great price.”  There’re lots of…

Factory ownership papers reduce the middlemen risk and fear!

Factory ownership papers reduce the middlemen risk and fear!

November 12, 2020

Red Flag Assessment Don’t be afraid to ask for ownership papers for the factory.  If the factory has some excuse about why they can’t share with you who owns the factory or a business license, that’s a big red flag. They’re obviously trying to hide something. Example (ownership papers):   It may be awkward to go to the factory and just say “You’re telling me you’re the factory, but I don’t believe you.  Show me your business license.”  That can be…

Starting a Business in China - WFOE EJV CJV

Starting a Business in China: How and Where to Start

November 5, 2020

Right now, small and medium sized entrepreneurs can work on starting a business in China (P.R.C.) with more confidence than ever. The Chinese government has committed itself to the protection of foreign partners’ investments, profits and legal rights. These guarantees protect against nationalization and uncompensated takings.   Whether you want to start an import-export store, boutique shop, hotel, restaurant, or establish a representative office, you must become familiar with relevant operating requirements. If you want to start a business (aside from…

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Truth about sourcing famous brands in China, not all Apples are equal

Truth about sourcing famous brands in China, not all Apples are equal

October 27, 2020

A Chinese supplier is offering famous brands at lower prices than your country, due diligence would be wise, it may be a scam. Even if it’s made in China, it may not actually be available in China. The truth about famous international brands. If it’s fashion or electronics, please realize two things. 1) Just because it’s made in China, does not mean that it’s available in China. Various major brands including apple…

Straight to the Source! Are you talking with the factory owner?

Straight to the Source! Are you talking with the factory owner?

October 20, 2020

How can you tell if you are talking with the factory owner? You want to go straight to the source to find out about the production of your products. You might ask him … “How many of your employees are from Hunan province?  How many from Sichuan?  How many from Guangdong?” The trading companies that represent these factories, they’re not on the ground of the factory day to day, they’re…

Small buyer, high risk & E-buyer beware! Don't fall into a scam trap!

Small buyer, high risk & E-buyer beware! Don’t fall into a scam trap!

October 14, 2020

  When is it likely that you will fall into a scam trap? You’re highly likely to fall into a scam trap if you meet the criteria as a small buyer or an e-buyer.  So if this describes you, be very careful. Two types of common buyers that fall into a scam trap: You’re a small buyer, meaning you place small orders—a couple thousand bucks or lower. If you’re a…

Focus on those factories that can clearly show production experience

Focus on those factories that can clearly show production experience

October 9, 2020

How do you know if a supplier has production experience? Focus on those factories that can clearly show production experience with your particular product or the production method.  When you ask “Show me some samples”, and it takes that factory weeks or months to get you some samples, it probably means that they don’t make that product on a day-to-day basis.  So they’re not the real factory! I remember one…

What are the two types of Scams?

Be wary of these two types of scams when sourcing in China

October 1, 2020

I’d like to share the various types of scams that you might possibly encounter if you are not vigilant. Even in this pandemic, other people might take advantage of the situation. This new series of blog articles will help you be aware and how to avoid these types of scams in China. Actually, China offers an extensive variety of products at amazing prices and foreign buyers are tempted to make…

China Supplier Contracts & Negotiations: PO vs Contract vs NDA - Part 1

China Supplier Contracts & Negotiations: PO vs Contract vs NDA – Part 1

September 25, 2020

Are you researching how to set up a China Supplier Contracts? If so, read more to learn useful tips in your dealings with Chinese entities. Are you researching how to set up a China Supplier Contracts?  Looking for strategies for the negotiations? In this article, I’d like to share some of the best practices and common pitfalls I have learned while spending 20 years living in Asia around dealing with…

What does it mean when the supplier supplies a large range of products - production experience?

What does it mean when the supplier supplies a large range of products?

September 18, 2020

For this latest article in our middlemen series, we’ll talk in detail about What does it mean when the supplier supplies a large range of products? But if you happen to missed the previous articles in our middlemen series, you can click these links. Why should you assume that all potential suppliers are middlemen? How do you know if a supplier is a trading company? We discussed in previous blog…

Trying to decide if you want to use a Lawyer from China or one from home? Click here to read 3 mistakes businesses make when not using a Chinese Lawyer...

Important Business Decisions: Using a Lawyer from China vs Hometown Lawyer

September 11, 2020

  Are you considering whether or not to use a Lawyer From China or one from home? A good Chinese lawyer with experience negotiating contracts with suppliers would know what terms to put into the contract to protect the buyer and not give the supplier a chance to send defects. But most lawyers outside of China would not have a clue. Over on my other blog I explain why it may…

How do you know if a supplier is a trading company - production experience?

How do you know if a supplier is a trading company?

September 4, 2020

How do you know if a supplier is a trading company? Red Flags will arise when doing your due diligence in investigation of a business to make sure your supplier is not a trading company. This article is second in a series Why should you assume that all potential suppliers are middlemen? … and we are going to talk about how do you know if a supplier is a trading…

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China Sourcing: 10 Common Mistakes

 

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