Chinese Business Scams | China Fever
Something like this probably happened.
Employee walks in to the office of the CEO, forgetting to knock due to all the excitement.
Employee:
“Mr. CEO, I just got an email from a huge Chinese company and they want us to do business with them and soon”
The CEO’s blood pressure, hearing these words is rising. New energy seems to be flowing into his mind. This is his chance to expand, a chance to break open a new market, sell to multi-million consumers, lift his career to the next level.
But he keeps his cool.
CEO:
“What do they want? Do we know that company”
Employee:
“They invite is to come over to Guangzhou and sign the contract. The amounts they are talking about are really huge. No surprise, as they have so many people there”
I never heard of them, but heck, this is a real opportunity
The employee chuckles after finishing this last sentence, this is really a no-brainer.
The CEO ponders a bit, he doesn’t want to show the employee he would rather be there yesterday.
CEO:
Ok, book the tickets, get me that book, Murdoch recommended, what’s it called , oh right “10 Tips For Guaranteed Success in China”, make some business cards with those characters and buy some presents.
A couple of days later they are in the plane. They had to postpone one day as the CEO went to the plastic surgeon to have an eternal smile fixed on his face. Always look friendly, he read.
Landed they find an impressive delegation waiting for them. Wow, the CEO thinks, these guys are serious. Outside a Buick is ready to bring them to their 7 star hotel after which they are invited to an enormous banquet.
No business is talked yet, he knows about that, first get to know each other. He finally though has the chance to exchange business cards and he feels they really appreciate the fact he studies theirs for at least 5 minutes each.
The next day they visit one of the top notch offices of the Chinese side. Again, Wow.
That evening he gets into a really good talk with the Chinese CEO. The translator is a lovely girl he wouldn’t mind, no he is here for the deal.
The Chinese CEO explains that they are impressed by his company, want to buy whatever he has in stock. The Chinese CEO also explains that as a proof of faith from the foreigners side they like them to contribute to some of the cost they have made.
It seems a bit much, he thinks, but on the other hand it’s normal. This way the Chinese side will know that we are serious on doing business.
The CEO orders the employee to have a considerable amount of money transferred.
This is China, this is how it works, the deal is as rock hard as steel and if this it what it takes to tie up the loose ends, please. Compared what we’ll make on the order it’s peanuts anyway.
A contract is signed and on arrival back in Foreign town, the board is waiting for him to congratulate him. We’re in, we’re doing business with China. Who ever said that doing business there is not easy is a fool.
A week goes by and they haven’t heard from the Chinese side as agreed. That’s China, he thinks, give them some time. Another week goes by and the CEO asks the employee to give them a call.
The Employee calls and hears.
“Sorry, the number you dialed does not exist”
The above is fiction but based on a story in Dutch newspaper based on a warning on the website of the Dutch embassy (only in Dutch)
Apparently they have realized in the provinces Guangdong, Yunnan, Henan and Guanxi that there is a China fever going on. Everything foreign wants a piece of the dumpling and will throw overboard any lesson they learned during their MBA.
In a way it makes me smile.
Sources: Volkskrant (Dutch), Embassy of the Netherlands (Dutch)
A related story about doing business in China
Pictures: Dumpling 1 , Dumpling 2
Posted
Friday, March 3rd, 2006 at 6:26 am,
View related entries in China Business.
Leave a response, or trackback from your own site.
September 17th, 2006 01:38
Don’t laugh..It happened to me in Xi’an, Shaanxi almost exactly as in your story. I realised something was up when they started asking for presents “because this is the custom in China”. I said that our company policy is not to give large value presents. When they finally understood that I was not going to back down, they made an excuse to cancel the evening’s entertainment and dumped me back at my hotel. So I only lost my airfare, hotel costs and a few days of my time.
The interesting thing about my experience was that they had a professional internet page, nice looking documentation etc, a presence on Alibaba.Com etc, etc. I still wonder whether they actually are a real company that just scams on the side or not…
The only way to be safe is to attach a “company policy statement” onto the bottom of your e-mails stating clearly that your company does not pay bribes or give away expensive gifts. Also, ask them to meet you halfway, or even to come to your country, rather than you visiting them. If they start to talk about gifts, tell them to get stuffed.
Good luck!
October 18th, 2006 16:27
Unfortunately this same thing happened to us, almost exactly as the sample story stated. We were asked to travel to a company called Kunze Trading (Henan Kunze Import and Export Co., Ltd.) in Zhengzhou, China. We failed to question the situation due to our excitement and the fact we have done several jobs in Zhengzhou, China. We made the trip, signed a “contract” and were then asked to purchase two expensive ($2000) gifts, which we only purchased one and explained it was a substantial amount of money for our size company. We lost the price of the one gift, hotel, airfare, and a couple of days. When they ask for gifts is it always a scam or is it sometimes just custom? Has anyone ever heard of this company?
October 21st, 2006 07:02
Read the stories of China Business Scam, and if you have any of yourself, feel free to share. …
October 22nd, 2006 14:12
Interestingly, I am living in Zhengzhou now. In case you should consider hiring a lawyer over that rip-off, check out the latest post on the China Law Blog for a story on a phony fly-by-night law firm.
The scam I would warn of is the old “get you drunk and then have you sign a contract” trick. Beware, they will always place a very friendly Chinese honey next to you on those occasions. So keep your eye on the ball…
February 9th, 2007 04:53
It happened to us exactly the same way as in the story. We were contacted in November 2006 by two different companies asking for a rather large quantity of goods. I was impressed by the offices and the positive relationshpip during the visit. The contracts were good and they signed quickly. After returning to Switzerland the pre-payment never arrived and the telephone lines were cut off. We didn’t pay for large presents and I think their trick might be to get some illegal credits with the contracs. The two companies are Yunnan Jinxida Import & Export Co. Ltd at Kunming (www.ynjxd.com) and Shenzhen Xiyida Invest Co. Ltd. at shenzhen (www.szxinyida.com)
May 9th, 2007 00:48
I am an English teacher in China. Here are some scams that I was involved with personally.
Warning to foreigners and tourist:
Price gouging is allowed in China. Guys and girls will ask you if you like to go to a club. Do not go! They sit you down in a room and start bringing you drinks food and then try to charge you about 3,000 Yuan RMB. This is over $300. They have two or three big Chinese trying to force you to pay.
This also happens to guys offered to see a lady”. They bring guys to a room, have 2 or more ladies and try to start by saying that the drinks for the lady are only 60 Yuan RMB. Then they bring you food and try to charge you more than 3,000 Yuan RMB and that guy doesn’t even get to take the lady for a massage or more as promised. This is one of the biggest scam for guys.
There is the tourist scam. Your are charged one price and when you get to where you are going, they try to get more money from you. What happened to me an two guys from India was that when I took the tour to the great wall, the guide tried to get another 120 Yuan RMB. I told him that I already paid and will not pay any more. I told him that I am an American and what they are doing is against the law in America and I will not be ripped off. I yelled and argued to give me all my money back and take me back to the hotel. He finially let me in. Then he tried another time and I yelled that I am American again and told him that we fight for what is right. Then I yelled like George Bush. I am not going to pay anymore because I already paid. He finially gave up because he thought that I was crazy.
The two India guys gave the tour guide a $100 chashiers check that was not signed. They did not sign the check and scammed the tour guide out of all the money. I told him that is what he gets for trying to cheat an american and forgieners. It is great when someone who tries to cheat people out of money gets cheated himself.
Another scam Chinese try to pull on tourist is walking up and asking them to have a look at what they have to sell. They bring tourists to a special room and over charge tourist at least three or four times the amount of what ever is being sold
Chinese are not shy to walk up and try to sell you things. If you say, “No” they will fallow you and hold you by the arm so that you can’t get away. They are not good at taking no for an answer. The best thing to do is to keep walking and not say a word.
There is also an art scam where guys and girls act like students and get you to just look at Paintings they say is their work. These same paintings are in all the students displays. They can’t all paint the same.
Having things that the Chinese on the streets are trying to sell does not stop them from trying to sell you another one and they are just as persistant as if you did not have any of what they are trying to sell.
Always remember to bargain with the Chinese on the streets and even the stands on the streets or you will pay a lot more than you have to. The standard rule is to offer about half or less of what they are trying to sell something for.
Chinese also take cuts anywhere there is a line. I was at KFC and a Chinese walked up in front of me and tried to order. I yelled at him and told him to get in the back of the line and wait your turn. I told him that I am an American and that is considered rude and Americans will not put up with it. The Chinese man who took cuts told me that he was sorry and walked away.
Watch out for the beggers. They will follow you and tap you on the arm with their cup and follow you if you try to walk away. I found something that seems to work well. Hit their cup and tell them to get out of here in a harse voice. It wouldn’t be so bad if there was only one begger but there are always teams of them. If they see you give money to one and you will have another four or five come up and ask you for money after that.
A lot of tourist consider Chinese rude and even harass people. Word of mouth is getting out about the Chinese. Not all Chinese are ill mannered. Most Chinese have pretty well mannered and nice. It is the few listed above that is going to give China a bad reputition.
Prediction of what will happen in China in the near future:
China is now a developing country. They are even starting to open their doors to the rest of the world. With this, foriegners will bring in their good and bad to China. We will bring in our crimes, tricks and bad ways. We will also bring in our goodness too like our religion, holidays, laws and manners.
China has many great places to visit and a lot of culture once you get over how different they are in life and manners.
May 30th, 2007 14:23
Thought you might be interested in reading an article about just such a scam that happened to our company. We (the Legal Department) tried to convince our Sales group that the contract was a scam, but they had to learn their lesson the hard way!! The scam company was called Shenzhen Jinfengying Industry Co. Ltd.
http://www.associatedcontent.com/article/258550/shenzhen_jinfengying_industry_co_ltd.html
August 27th, 2007 19:39
Well I wish I read all of this last MONDAY!!
My business partner and I just spent 4 days in Xi’an City, in the Shaanxi Province of China. In hopes of a very large sale with a company that contacted us via Kompass. The company is called Shaanxi Jincang Import and Export Trade Co., Ltd.-http://www.sxjincang.com/ynen/index.html
Funny thier website looks exactly like one mentioned in a previous comment posted but with a different company name! (Yunnan Jinxida Import & Export Co. Ltd)
We were a little concerned when they asked us to come in on Saturday morning to sign the contract. It was Friday night when we noticed in the contract negotiations that they wanted us to pay a $9,000 “Quality Guarantee” on our product sample. In addition to presenting their managers with a “gift” which was written down on paper by the translater as “cash in a small box.” Our lawyers warned us not to sign anything until we returned and that the $9,000 seemed very strange. So we took his advice.
On the upside, they did take us out for dinner on both Friday and Saturday, and they drove us to see the Terra Cotta Warriors and they paid for all of that. So our company is only out $6,600 (plane tickets, travel, hotel) but at least we got to visit China. Seriously though, somebody needs to stop these people from scamming companies around the world!
September 17th, 2007 23:09
Looked too good to be true
Hello Jean,
Ok i can tell you that our currently business is to find cooperaters from oversea. Our major trading products are foods and cosmtics which have high quality and of great demands in uChina.
As you know our China is developing faster and faster. The living standred is higher day by day. And people desire for new things especially the import products. That why we require that the partners we chose must not have their products sold in China before. Then with our partners together, we will do our best to open the Chinese markets and established the new brand for our new products. We truely have great faith in your products, and Professional as we both are, i think it will be very easy for us to reach our aim.
About the oversea customers, of course we have many from different countries around the world. But i can’t tell you now. Because it our commercial secret. hope you can understand. But after you have signed the contract with us in our company, we can be the communicate bridge and to help you get the information you need.
If you have any questions, pls don’t hesitate to let us know.
best wishes,
Abby
.
写道：
锘?lt;!DOCTYPE HTML PUBLIC “-//W3C//DTD HTML 4.0 Transitional//EN”>
Hi Abby,
Could you please provide me with references on your current business?
Could you give me a list of overseas customers you are dealing with?
Best regards,
–
Jean-Baptiste (JB) Weiler
Export & Regional Sales Manager
——————————————————————————–
From: Abby
Sent: Sunday, September 16, 2007 9:07 PM
To: JB Weiler
Subject: 鍥炲锛?RE: 閸ョ偛顦查敍?Invitation to China
Hi Jean,
I’d like to suggeat that the reason that we invite you to China is to finalized the formal order and the contract and to talk about how to establish the brand in China with our president.
As you know, Our company always does not make one list business, because must set up a brand to need to spend our massive time, Money manpower and physical resource. Bilateral face-to-face discussion some questions need compared to send MAIL to come officially moreover detailed.
I think both of us has pay much attention to this case. If you still stick to your opinion, well let’s stop wasting eachother’s time. I really don’t want our effotrs to be wasted.
best wishes,
Abby
JB Weiler 鍐欓亾锛?lt;/DIV>
Hi Abby,
At this point, I will not be traveling to China for face to face meeting.
Our company existed since 1993, we have the top selling potato chips lines in Japan and do well in Hong Kong and Taiwan.
We are ready to ship your orders once formal order is received and paid. Once we have shipped orders and you have established the brand in China, I will be happy to come to China.
Since we have no sales in China, I would be happy to give you the exclusive on the market.
Best regards,
–
Jean-Baptiste (JB) Weiler
——————————————————————————–
From: Abby
Sent: Thursday, September 13, 2007 9:30 PM
To: JB Weiler
Subject: 鍥炲锛?Invitation to China
Dear Jean,
Thank you for your invitation.
Here i’d like to know what do you mean by “Prior to visiting your company in China, we will need to have some business established” ? After I have placed the primary order to you and sent you our stylebook of the contract. I think the primary business we have established. Now we only lack one step to built our final busniss. It’s that you can come to us to sign the final contract.
As i have told you that Our company does not accept besides the signature formal contract any form contract. Contract signs which in China, needs bilateral President the face-to-face signature to be able to be effective personally, therefore, why this is we invites you to come the reason which our China signs a treaty.
Now the only thing we want you to do is that you come to us to have a face to face talk with our president. And we want you to know more about Chinese markets and our Chinese’s needs, according to the Chinese people life level to develop some new products for our contract order. Also you can make sure whether we have the actual strenth to cooperate with you to help you open Chinese markets.
The same, after this yours inspection, we also can arrive your country to carry on the visit and the inspection, will prepare for our next long-term cooperation.
We have the enormous interest truly to your product.In second order form time, we may be you in China’s sole agents.
I hope you can understand our sincerity and make a wise decision soon.
Have a nice day!
Abby
鍐欓亾锛?lt;/DIV>
Dear Abby,
Prior to visiting your company in China, we will need to have some business established
You are of course welcome in the US to visit the plant.
Let me know how you want us to further proceed.
Best regards,
–
Jean-Baptiste (JB) Weiler
September 20th, 2007 18:39
I believe this is a scam it looks and reads like all the others. read it and be aware.
THEIR EMAIL ADDRESS: zgynkxxx@126.com *Reply to this address
Contact Person: Mr yang
Contact Phone No: 86–xxxxxxx
Country: China
Message: We, Kunming Ouaosi company is a trading company. We often order various goods for our respected customers in China, and we are
interterested in your machines .So , if you are interested in exporting your products into China,we want to buy some.
Please contact with us and inform us your website, then we will give our great help to your company.
In addition, if you had office in China, please inform us, so that we can contact the people of your
office in China directly. Choosing us will be a good choice!
Lets make the profits and create the future hand in hand!
Ouaosi Trading Company, Room312, Guo Tai Building ,No.474,East
Ring
Road,Yunnan province,Kunming,China
[edited out the phone number etc]
Sincerely,
Mr. Yang
September 20th, 2007 20:01
Oh Wow…I WISH I READ THIS LAST MONTH….I’m In the 24 th day of the 25 days necessary to transfer my huge first payment. It happened just as you said. A big order and a demand for you to come to their country. You think its normal because they can’t get out. They guaranteed prepayment how could you go wrong? So I went to guyang capital of a southern province. Howard Johnsons was 5 star and nice. My “new friends” had me picked up at the airport. We did our big contract signing upstairs in a building that was on their corporate website. Interesting deal they emphasized being friends and trust is real important right. So then they want me to share the expense of the wiring fee. 3888 R&B or about $1800. I payed and my attorney friend who I bought said you got shook down dude. I was like this is Vegas in a different way. I’ve had friends rooting for me the last month as we wait for funds that won’t show. Its amazing that they will spend months and drag you over just to rob you politely for change that looks like your airfare. Hope you don’t get scammed like this.
September 20th, 2007 22:27
@John K
It’s hard to say whether your mail is a scam. At first sight it seems a genuine email showing interest in your products and they actually ask if you have an office in China to deal with which, if you have, would make a potential con a bit harder.
As much as goes wrong, there is also decent business done here so not every mail is bad intended.
October 16th, 2007 23:07
Have anyone heard of this company - Shuangji International Material Imports and Exports Company located at Hutou Heilongjiang Province China. They said they are the purchasing centre on behalf of their HQ in Russia. Their website is www.shuangjigm.com.
They contacted our company in Sep 2007 and later issue us PO for purchase a reasonable amount of goods. They also agree to T/T in full for the first deal.
They also invite us to go over to Dalian to sign the contract saying their CEO from Russia HQ will be in Dalian for meeting around 17th Oct - 31st Oct. The CEO and all the officials like to know more about our products, company and future cooperation. Once the contract is signed, then we can expect to receive payment after we return to Singapore.
Is this another business scam? If it is, we hope this will alert all businessmen to exercise extra cautious when dealing with such scam.