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Importing From China? 3 Things To Watch

Jan 19, 2008
China has been in the news lot lately with economists remarking on its rampant growth, calling it "the factory of the world". However, it hasn't all been positive press and some coverage of product safety and quality concerns, and the questionable integrity of some Chinese manufacture and trading firms, have left an image in some buyers' minds of a place where nothing is safe and nobody can be trusted.

So are all the criticisms true? We decided to look at the three most common myths of buying products from China and see how valid they were.

1. "Chinese products are unsafe."

This is a long-held belief that has been brought to the forefront of people's minds again by several high-profile cases in the US.

Mattel enacted a massive toy recall in August 2007 because the toys had been decorated with lead paint, an illegal practice in many western countries. An estimated 10.5 million toys were recalled, which led people to question the safety of many other Chinese products.

Who is to blame in such cases?

Some Chinese export companies say that people are looking in wrong place for answers and, instead of looking at manufacturer, we should look at the companies ordering the products.

Rose Li, Chinavasion public relations manager, said Chinese factories were only able to work to the specifications given to them by the customer.

"Chinese factories will view improved materials and certification as optional extras, which increase the price," she said.

Ms Li said importers looking at sourcing products from China should first find out the end markets' exact safety compliance standards before telling the manufacturer about the exact specifications they needed for the product.

She said it is also a good idea to buy a single item first to check that the product was safe and worked well to guarantee customer satisfaction.

2. "Chinese manufacturers will try to cheat you after you pay."

If you search online for phrases like "china scammer" or "china fraud" you'll immediately see hundreds of stories about people who have been cheated by fake sellers or dishonest dealers in China. But people with positive stories are less likely to speak out.... so perhaps when you look for negative stories, you're getting a skewed picture.

Steve Wu, Chinavasion purchase specialist, recommended those using credit cards to do it through a third party payment handler like PayPal.

"That will prevent the seller from getting sensitive credit information from the buyer and allow the buyer to stop the payment if there are any problems with the deal," he said.

Another key piece of advice offered by regular goods traders is to transfer money into company bank accounts and not personal bank accounts, and always keep a documented record of transactions to help dispute cases if things go wrong.

3. "There is no way to tell if a Chinese company is legitimate."

This is a particularly big fear for exporters who buy online or over the phone and are afraid the company they are ordering their products in might not actually exist, or may be in financial trouble, leaving them no recourse if they pay for an order and that order does not arrive.

Analysing some case studies of people who've been scammed, certain patterns emerge. Seasoned importers will spot obvious danger signs at the beginning of each story that should have warned the buyer away at an early stage... before money changed hands.

Many Chinese manufactures are also registered in Hong Kong and can be checked online at icris.cr.gov.hk/csci/
About the Author
To get a complete, free, e-course on profiting from China wholesale, visit http://www.chinavasion.com now.
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