There is one rule in our business that I repeat to all newbies: don't trust anyone. Especially when you start working with a new partner in China. The price of one mistake is not just a loss of money. This is a lost cargo, a broken contract and a blow to reputation. It's your money that you're going to lose, not someone else's.
Therefore, any inspection of a BRICS company, and especially a Chinese one, is not paranoia. This is basic hygiene. But the main problem is not even the outright scammers. It goes deeper — in the difference of mentalities.
We and the Chinese have a completely different idea of what a "job well done" is. Do you remember the Soviet cartoon where they ordered seven hats from one sheep's skin and eventually received seven thimbles? This is a perfect illustration of working with China.
Technically, you have not been deceived. But you were extremely unhappy with the result, because you did not say all the details down to the smallest detail. You should always remember that you are talking to a person who does not think the same way as you.
At the same time, the Chinese perfectly combine friendly relations and business. The fact that you're friends doesn't stop them from calculating very carefully who owes whom and how much. There is a revealing story about Chinese weddings. The guests give money in envelopes, and a special person immediately opens them, counts them and writes them down in a book.: "Mr. Wang gave so much." And after the wedding, the family sits down and checks this book with notes from previous years: "Yeah, we gave the Ivanovs 1,500 yuan for their wedding, and they gave us only 1,000. It's not good." At the same time, they will continue to be friends and communicate with them. Friendship does not negate scrupulous financial accounting. It's the same in business.
First level: what lies on the surface
Let's start with a simple one — with what you can do without getting up from your chair. This is the minimum set, without which you should not even start a conversation.
First. Does the company even exist? A beautiful website is not proof. We need an official document. In Russia, this is an extract from the Unified State Register of Legal Entities. In China, there is a business license (营业执照). Request it from your partner. It has a unique number, which can be used in special databases (for example, 爱企查) to check who is the owner and who is the director.
And here's the first trap.: you think that you are signing a contract with a well-known trademark, but the contract contains some unknown "Horns and Hooves LLC". Always check who signs the contract and who is listed in the license as the supervisor. If they are different people, you need to ask questions.
Second. Does the company have money? You need a financial assessment of the counterparty. Request financial statements. If they refuse, it's a red flag. Unlike in Russia, Chinese companies are not required to publish their reports, so it is difficult to obtain them. But it's worth a try.
The third. Reputation. Look for reviews, but not on their website. See industry forums, ask your colleagues. Is the company affiliated with professional associations? This is not a guarantee, but at least some kind of filter.
Second level: Chinese specifics
That's where the fun begins. Because online verification in China yields very little. You can search through the company's registry and see that it exists. But that won't tell you anything about its actual capabilities.
The classic Alibaba story: find a supplier, the price is a fairy tale, transfer the prepayment, and that's the end of it. Therefore, the reliability of the supplier in China is tested differently.
The first way is through small transactions. Start with small, trial batches. This will allow you to evaluate the quality, compliance with deadlines and the overall adequacy of the partner without risking a lot of money.
The second way (for large transactions) is to work through your own legal entity in China. This is how large companies operate. Why? Because you have practically no leverage over a Chinese supplier from Russia. In the event of a dispute, suing them on their territory is long, expensive, and almost futile. Therefore, a Chinese legal entity is being created, and a contract is concluded between two Chinese companies. In this case, all disputes are resolved within China according to their laws, and the chances of success are much greater.
What about the certificates?
Often, as proof of reliability, you will be shown different certificates, for example, ISO 9001 (quality management). It sounds solid. But there is a nuance here too. The certificate could have been obtained with an old, experienced owner, an engineer who really built all the processes. And then he handed the case over to his son, who doesn't understand anything about it and is chasing an open marriage. The certificates are still there, but the quality is gone.
You can simply buy any certificate in China. Therefore, having beautiful papers is good, but you can't blindly trust them. This is just one of the verification points, but not the final one.
Aerobatics: on-site personal check
Let's say you've checked everything. Does this mean that you can trust? No. A real check is always a personal visit.
The only reliable way is to drive and see with your own eyes. The higher the transaction receipt, the more important this stage is. We need to go to production. Look at the equipment, the organization of processes, and how people work. It often happens that according to the documents, the company has a huge factory, but in fact you arrive and see a small workshop with three workers.
Sometimes it's useful to pretend to be a "spy." If you speak a little Chinese, don't show it. Let them communicate with you through an interpreter. You will be surprised how much useful information can be heard in conversations that are conducted in your presence, fully confident that you do not understand anything.
In conclusion
All this multi—level verification of the BRICS company boils down to one thing - minimizing risks. It is impossible to completely eliminate them when working with China. But it is necessary to reduce it.
Don't be lazy. Go through the databases, request documents, start small, and for big deals, be sure to go to the place. One day spent on a thorough check can save you months of problems and millions. In international trade, especially with China, it is not the fastest that survives, but the most cautious.
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