The opportunity to benefit from a reduction in the cost of production can often cover the eyes with a fog, because of which a foreign representative will simply not notice the deception on the part of the Chinese partner. Moreover, “deception” can mean not only fly-by-night dirms, but simply low-quality production posing as a supplier with exclusive and expensive goods.

What shall be done by an entrepreneur from abroad

The very first and obligatory task is to check the documents. Yes, many are already aware that this needs to be done, but if there were no incidental situations, then this fact would not have been mentioned. It is required to thoroughly review absolutely all the documents, from the certificate of registration of a legal entity to certificates for production, transportation, etc. Russia has an obligation to mark certain groups of goods – the possibility of such marking shall be clarified before concluding an agreement. The most common deception on the part of the supplier is the “underweight” of the goods during loading. This is often the fault of suppliers from Alibaba.com.

So what to do?

It is imperative to visit the plant and do it personally. Chinese scammers have a number of tricks, some are obvious, and for others our people are simply not prepared. Arriving at the plant, preferably for a few days, will give you the opportunity to:

• Assess the quality of the product being created, note the percentage of defects;
• Determine that this is not a scammer who leased the plant, but its real owner (more details later);
• Assess the speed of the production process.
• Check all incorporation documents, licenses, certification (check that all addresses and owners are the same)
• Check in the register of court cases, the amount of export turnover, the amount of taxes paid, etc.

In China, there is really such a practice that a scammer rents a plant, warehouse or office in order to show a foreign entrepreneur a beautiful picture that is absent in reality.

Subtleties of paperwork when concluding contracts

It is worth preparing for the fact that the Chinese really do not like to draw up contracts. You can often hear phrases like “we all work on trust, do you really not trust us?” This may be true, but in reality this is an attempt to avoid any responsibility. Therefore, you should immediately understand that the contract shall be detailed, and not for a show, since in case of litigation there is a high chance to lose a case. The more detailed all conditions, obligations and risks are – the better.

It is worth protecting your intellectual property. If you demonstrate at an exhibition a device for which there is no license, its full copying by China is only a matter of time. Therefore, you need to protect your rights to devices, developments, trademarks, etc. It is better to defend anything that can be defended.

The contract shall be drawn up in two or three languages. The main language in this case will be Chinese. Which one will be used by the second/third – does not matter, it can be English or Russian, as convenient for you. Be sure to request a copy of the ID-card from the director or representative. The signature consists of two or three hieroglyphs denoting the surname and first name. It should be noted right away that the Latin alphabet shall not be there.