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Sourcing from Chinese factories: The business ethics you ought to be aware of

By Weintrade   |   23 Jun, 2017
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id="pre">pre{margin:.5em 0;padding:.4em .6em;border-radius:8px;background:#f8f8f8;}</style><style id="loading">.loadingclass{display:inline-block;cursor:default;background: url('js/lib/ueditor/dist/themes/default/images/loading.gif') no-repeat center center transparent;border:1px solid #cccccc;margin-left:1px;height: 22px;width: 22px;} .loaderrorclass{display:inline-block;cursor:default;background: url('js/lib/ueditor/dist/themes/default/images/loaderror.png') no-repeat center center transparent;border:1px solid #cccccc;margin-right:1px;height: 22px;width: 22px;}</style><style id="anchor">.anchorclass{background: url('js/lib/ueditor/dist/themes/default/images/anchor.gif') no-repeat scroll left center transparent;cursor: auto;display: inline-block;height: 16px;width: 15px;}</style><style type="text/css">body{background-color:#ffffff; background-image:; background-repeat:repeat; background-position:0% 0%; height:3038px; }</style> </head><body ><p style="margin: 0pt;"><span style="font-size: 10.5pt; font-family: 微软雅黑, &quot;Microsoft YaHei&quot;;">China is a fast developing country that attracts a growing number of businessmen from all over the world to relocate their supply chain to this country. However, most of them on the initial stage face a lot of problems resulting from the lack of experience and knowledge about Chinese business culture and eastern mentality. To avoid these problems and secure your business in China you should know some rules about business ethics and Chinese culture. We will help you to figure them out in this article, where we try to describe Chinese business ethics in the most objective way.</span></p><p style="margin: 0pt;"><span style="font-size: 10.5pt; font-family: 微软雅黑, &quot;Microsoft YaHei&quot;;"><br/></span></p><p style="margin: 0pt; text-align: center;"><span style="font-family: 微软雅黑, &quot;Microsoft YaHei&quot;; font-size: 16px;"><strong><span style="font-family: 微软雅黑, &quot;Microsoft YaHei&quot;; font-weight: bold;">Why should we learn about business ethics in China?</span></strong><strong><span style="font-family: 微软雅黑, &quot;Microsoft YaHei&quot;; font-weight: bold;"></span></strong></span></p><p style="margin: 0pt;"><span style="font-family: 微软雅黑, &quot;Microsoft YaHei&quot;; font-size: 18px;"><strong><span style="font-family: 微软雅黑, &quot;Microsoft YaHei&quot;; font-weight: bold;"><br/></span></strong></span></p><p style="text-align: center;"><img width="426" height="228" src="https://img.weintrade.com/attachment/blog_content/2017/2c87f8bd71df46739cc48cb62427cbc7.jpg"/></p><p><br/></p><p style="margin: 0pt;"><span style="font-size: 10.5pt; font-family: 微软雅黑, &quot;Microsoft YaHei&quot;;">Dealing with Chinese enterprises and factories is far not the same as dealing with Americans or representatives of other western business cultures. Several years before, it was hard to have a good advice about business relations in China, but now there are plenty of consultants, courses, training and literature about building business relationships with Chinese companies. As any education, those ways of learning about business relations will be useful and can help you to avoid many mistakes in China. Mistakes that can endanger your successful business with this country. Here we will talk about the first five things you should know about Chinese partners:</span></p><p style="margin: 0pt;"><br/></p><p style="margin: 0pt;"><span style="font-family: 微软雅黑, &quot;Microsoft YaHei&quot;;"><strong><span style="font-size: 10.5pt; font-weight: bold; font-family: 宋体;">1) Contracts</span></strong></span></p><p style="margin: 0pt;"><span style="font-size: 10.5pt; font-family: 微软雅黑, &quot;Microsoft YaHei&quot;;">China is a populous country, where many companies should struggle to keep their place in the market. Amid the fierce competition between companies, no wonder that some Chinese businessmen will be ready to do many tricks to make their companies survive among the rivals. By admitting this fact, it’s a hasty decision for foreign companies that don’t have many years of experience in China -and what’s more important don’t have strong legal support in the country- to blindly rely on the contract and strongly believe that the Chinese party will strictly observe its terms. In Chinese business culture, this document doesn’t control both parties&#39; action as it does for instance in Germany or the US. During the negotiation, you reach a certain agreement and record it in the contract. But the trick is the possibility that after signing a contract, the Chinese party can reconsider some of its terms. There is a default presuming that the terms of agreement can be changed according to circumstances. Moreover, it’s even a good case scenario if your Chinese partner decides to discuss such changes with you. In some cases, surely, you’ve heard about such stories, when the supplier just doesn&#39;t fulfill some terms of the agreement. And this can frighten potential foreign investors and entrepreneurs from direct negotiations with Chinese factories. However, it doesn’t mean that contract shouldn’t be thoroughly drafted and reviewed. It means that you shouldn’t fully rely on a contract, but also consider other factors. </span></p><p style="margin: 0pt;"><span style="font-size: 10.5pt; font-family: 微软雅黑, &quot;Microsoft YaHei&quot;;">For that reason, it’s the greatest advantage to cooperate with a trustful trade agency in China (like our WeInTrade E-commerce Platform), because such an agency deals only with qualified and reliable companies involved in the trade process. What’s more, trade agencies can guarantee legal support and safety, and being an international enterprise ensures that both parties will fulfill all contractual obligations. </span></p><p style="margin: 0pt;"><br/></p><p style="margin: 0pt;"><span style="font-family: 微软雅黑, &quot;Microsoft YaHei&quot;;"><strong><span style="font-size: 10.5pt; font-weight: bold; font-family: 宋体;">2) Mediators or agents</span></strong></span></p><p style="margin: 0pt;"><span style="font-size: 10.5pt; font-family: 微软雅黑, &quot;Microsoft YaHei&quot;;">It’s really hard and risky try to find a Chinese partner without a mediator. Chinese business culture developed the way that Chinese companies prefer to deal with someone they know well or with those who are recommended by people they know. Toward strangers, Chinese in the first place don’t have much trust or respect. If you want to meet a new partner, you have to be introduced by a Chinese person you know. There are a lot of consulting agencies that can offer you such intermediary services. It’s better not to try to find and negotiate with the Chinese side on your own because in that case it is very hard to set up relations with a partner and you’ll have to take care about everything by yourselves, and make sure everything is done perfectly in according with Chinese ethics. Most possible outcome is that the Chinese party will be dismissive about you or offer you the most unfavorable terms because Chinese businessmen always know where their interests lie. </span></p><p style="margin: 0pt; text-align: center;"><span style="font-family: 微软雅黑, &quot;Microsoft YaHei&quot;;"><strong><span style="font-size: 10.5pt; font-weight: bold; font-family: 宋体;">&nbsp;</span></strong></span></p><p style="margin: 0pt; text-align: center;"><span style="font-family: 微软雅黑, &quot;Microsoft YaHei&quot;; font-size: 16px;"><strong><span style="font-family: 微软雅黑, &quot;Microsoft YaHei&quot;; font-weight: bold;">If you want to meet a new partner, you have to be introduced by a Chinese person you know.</span></strong><strong><span style="font-family: 微软雅黑, &quot;Microsoft YaHei&quot;; font-weight: bold;"></span></strong></span></p><p style="margin: 0pt;"><br/></p><p style="margin: 0pt;"><span style="font-size: 10.5pt; font-family: 微软雅黑, &quot;Microsoft YaHei&quot;;">For that purpose, if a person doesn&#39;t want to have difficulties with negotiations, he or she should entrust this work to professionals from the agencies that will help with sourcing from China and finding reliable manufacturing partners with a mutual trust. WeInTrade, being this kind of agency, provides security for both sides. It guarantees that nothing will go wrong.</span></p><p style="margin: 0pt;"><br/></p><p style="margin: 0pt;"><span style="font-family: 微软雅黑, &quot;Microsoft YaHei&quot;;"><strong><span style="font-size: 10.5pt; font-weight: bold; font-family: 宋体;">3) Potential for long-term relations</span></strong></span></p><p style="margin: 0pt;"><span style="font-size: 10.5pt; font-family: 微软雅黑, &quot;Microsoft YaHei&quot;;">If you are unable to demonstrate your serious commitment to future cooperation and opportunities for long-term partnership, your new Chinese partner would think that is only a one-time deal between you and them. Chinese partners won’t be interested a long-term one. Of course, in such case, Chinese companies agree to have a one-time deal with you, but then they will try to make as much income as possible out of that. To get really good conditions, that provide you with a good margin in your marketplace, you’ll have to prove that you are trustworthy and a good potential partner, to get long-time cooperation. Sometimes it takes years to prove this for Chinese parties.</span></p><p style="margin: 0pt;"><br/></p><p style="margin: 0pt;"><span style="font-size: 10.5pt; font-family: 微软雅黑, &quot;Microsoft YaHei&quot;;">WeInTrade is able to build the foundations for a long-time cooperation; partners trust us and wish to cooperate with foreign companies through us on a long-term basis. </span></p><p style="margin: 0pt;"><br/></p><p style="margin: 0pt;"><span style="font-family: 微软雅黑, &quot;Microsoft YaHei&quot;;"><strong><span style="font-size: 10.5pt; font-weight: bold; font-family: 宋体;">4) Margin and quality</span></strong></span></p><p style="margin: 0pt;"><span style="font-size: 10.5pt; font-family: 微软雅黑, &quot;Microsoft YaHei&quot;;">When starting a business with China with the firm intention to get a minimal cost and maximal margin all at once, then you can forget about quality. Chinese companies have a special notion about quality issues, deeply correlating with the cost of the product you close a deal on. There are a lot of stories in which after the supply agreement is signed, the purchasing party gets a very different product or with defects. Clearly, you can’t avoid it if you are not aimed to work with quality Chinese suppliers, which cost more than you originally expected.</span></p><p style="margin: 0pt;"><span style="font-size: 10.5pt; font-family: 微软雅黑, &quot;Microsoft YaHei&quot;;">There is a way to solve quality control problems, by hiring a person that will go to the manufacturing place to check the products before they are shipped and on this stage sort out everything that doesn&#39;t meet the product’s standards. Nevertheless, these procedures still add some expenses and do not guarantee that you order a good quality product at first place at the minimal price. </span></p><p style="margin: 0pt;"><span style="font-size: 10.5pt; font-family: 微软雅黑, &quot;Microsoft YaHei&quot;;">&nbsp;</span></p><p style="white-space: normal; text-align: center;"><span style="font-family: 微软雅黑, &quot;Microsoft YaHei&quot;; font-size: 16px;"><strong>Do not guarantee that you order a good quality product at first place at the minimal price.</strong></span></p><p style="white-space: normal;"><span style="font-family: 微软雅黑, &quot;Microsoft YaHei&quot;;"><strong><span style="font-size: 14px; font-family: 宋体;"><br/></span></strong></span></p><p style="text-align: center;"><img width="580" height="270" src="https://img.weintrade.com/attachment/blog_content/2017/df128190f4d044a38b5e3dd7e6152166.jpg"/></p><p style="text-align: center;"><br/></p><p><span style="font-size: 14px; font-family: 微软雅黑, &quot;Microsoft YaHei&quot;;">To have a considerable cost reduction without quality losses, companies can turn to companies like WeInTrade. WeInTrade deals only with high-class manufacturers that pass all quality inspections and prove their reliability. Those manufacturers can produce customized products or already designed merchandises with high quality, which has its costs. The ways how WeInTrade reduces such costs keeping the high standards of quality are the following: </span></p><ul class=" list-paddingleft-2" style="list-style-type: disc;"><li><p style="color: rgb(0, 0, 0); font-size: 16px; font-style: normal; font-weight: normal; margin-top: 1em; margin-bottom: 1em;"><span style="font-size: 15px; font-family: 微软雅黑, &quot;Microsoft YaHei&quot;;">Direct cooperation with original manufacturers without any additional intermediates and dealers that incredibly shorten the number of participants in the supply chain, consequently eliminating all shares that such participants add to final cost;</span></p></li><li><p style="color: rgb(0, 0, 0); font-size: 16px; font-style: normal; font-weight: normal; margin-top: 1em; margin-bottom: 1em;"><span style="font-size: 15px; font-family: 微软雅黑, &quot;Microsoft YaHei&quot;;">OEM provides companies with services to produce merchandise, customized and designed individually, enabling to have the desired product without unnecessary elements or functions with a lower price.</span></p></li><li><p style="color: rgb(0, 0, 0); font-size: 16px; font-style: normal; font-weight: normal; margin-top: 1em; margin-bottom: 1em;"><span style="font-size: 15px; font-family: 微软雅黑, &quot;Microsoft YaHei&quot;;">WeInTrade helps to lower costs through organizing more efficient logistics and customs tax reimbursements. That is to say, professionals in logistics and customs clearance are able to make your costs in that sphere significantly lower. </span></p></li><li><p style="color: rgb(0, 0, 0); font-size: 16px; font-style: normal; font-weight: normal; margin-top: 1em; margin-bottom: 1em;"><span style="font-size: 15px; font-family: 微软雅黑, &quot;Microsoft YaHei&quot;;">WeInTrade risk control will guarantee the security of payments, deliveries, and other aspects, so you can avoid unexpected costs. </span></p></li></ul><p><span style="font-size: 14px; font-family: 微软雅黑, &quot;Microsoft YaHei&quot;;">&nbsp;</span></p><p><span style="font-family: 微软雅黑, &quot;Microsoft YaHei&quot;;"><strong><span style="font-size: 14px; font-weight: bold; font-family: 宋体;">5) Ethics and customs in business</span></strong></span></p><p><span style="font-size: 14px; font-family: 微软雅黑, &quot;Microsoft YaHei&quot;;">Failure to follow business etiquette and local business practices can lead to big difficulties on each stage of negotiation. If you address to the supplier in the wrong way, they can even not let you to the doorway of their company. If you were invited to their office, it does not mean that your profitable proposition will be accepted just only because it’s profitable, for instance, it may not if your style of communication is too plain and assertive. And even if your offer was accepted, it also doesn&#39;t mean that you won’t have any problems later. Traditions are of great importance in China. Of course, money is a greater deal than before, but it’s not the most important thing after all. Chinese believe that etiquette and Confucian rules of ethics in life and business are aimed to show respect for others. Such respectful behavior in its turn should arise respect between partners. You can’t go on in Chinese business culture without respect. The problem is that there are completely different categories that stand behind the word “Respect” in China in comparison with the Western world. Therefore, that’s why it&#39;s so useful to learn Chinese culture.</span></p><p><span style="font-size: 14px; font-family: 微软雅黑, &quot;Microsoft YaHei&quot;;">&nbsp;</span></p><p><span style="font-size: 14px; font-family: 微软雅黑, &quot;Microsoft YaHei&quot;;"></span></p><p style="margin: 0pt; white-space: normal; text-align: center;"><span style="font-family: 微软雅黑, &quot;Microsoft YaHei&quot;; font-size: 16px;"><strong><span style="font-family: 微软雅黑, &quot;Microsoft YaHei&quot;;">Chinese believe that Confucian rules are aimed to show respect for others.</span></strong></span></p><p><span style="font-family: 微软雅黑, &quot;Microsoft YaHei&quot;;"><strong><span style="font-size: 10.5pt; font-family: 宋体;"><br/></span></strong></span></p><p style="text-align: center;"><img width="394" height="295" src="https://img.weintrade.com/attachment/blog_content/2017/32ce562e7e0c4e4fab39d7332f4e7736.jpg"/></p><p style="margin: 0pt; text-align: center;"><br/></p><p style="margin: 0pt;"><span style="font-size: 10.5pt; font-family: 微软雅黑, &quot;Microsoft YaHei&quot;;">When studying Chinese mentality it is better to start with such notion as “Mianzi” – face, the thing that when is “lost” can inflict a breach in relations, the very business etiquette you can’t start negotiations without;Relations “Guanxi” – in China means the system of personal relations any person has, that helps solve problems and do things, it’s like the so-called old boy network, but much more complicated and sophisticated. Relations are the basis of Chinese business culture. To build good “relations” with Chinese partners you’ll need a lot of patience, flexibility, ability to show respect and knowledge about communicational culture. The understanding of how culture influences business gives a businessman a lot of keys to success. By contrast, the ignorance of business culture and ethics can become the greatest mistake. </span></p><p style="margin: 0pt;"><span style="font-size: 10.5pt; font-family: 微软雅黑, &quot;Microsoft YaHei&quot;;">Knowing that we will continue to inform our audience about the ethical aspects of Chinese business on WeInTrade website, you can follow our news to stay informed of how to do business in China, and our agents are always available online to give you advice and consulting, to help you prepare for a negotiation. Choosing us as an intermediary between you and your Chinese partner, you will be able to eliminate language-cultural barriers and be a winner in all negotiations. </span></p><p style="margin: 0pt;"><br/></p><p style="margin: 0pt;"><span style="font-size: 10.5pt; font-family: 微软雅黑, &quot;Microsoft YaHei&quot;;">Finally, we would like to point out that Chinese business reality is a perfect match for the famous Latin saying “Ignorantia non est argumentum” which means that ignorance will not be an excuse for any mistake a foreign company may make when dealing with a Chinese counterpart. That is why all enthusiasts and entrepreneurs that want do to or are already doing business with China should arm themselves with the knowledge about Chinese business ethics and get a good trustworthy agent that can help reduce costs and guarantee your business security at the same time. By doing that, you ensure your success in foreign trade and get a fast development opportunity for your venture. </span></p><p style="margin: 0pt;"><span style="font-size: 10.5pt; font-family: 微软雅黑, &quot;Microsoft YaHei&quot;;">&nbsp;</span></p><p><br/></p></body></html>
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