The fake businessmen, bribes and a ‘legal’ agreement.
So……having read a few books on Chinese business practices I set about trying to establish ‘face’ and creating ‘Guanxi’. It meant sorting the wheat from the chaff and being prepared to part with money upfront to establish my credentials. A risky move which didn’t always pay off. Some of which I’ll tell you about now.
During my first visit I was sat in the hotel bar at about one in the morning, unable to sleep due to the 8 hour time difference, when I was approached by what looked like a credible business man. He spoke very little English but asked what I was doing in China. I told him and remarkably he had a friend who owned a marble factory. He said he would introduce us the next day. The next morning arrived and I was met in the lobby by a small group of Chinese with a couple of cars and introduced to his ‘friend’. We were taken to a marble factory and ushered in to the factory floor. The factory was indeed large and impressive and I was interested in the possibility of doing business with them. We began to discuss this possibility and I asked, as it was 84° if we might go into an air conditioned office. This was not possible for some not altogether clear reason but we were then quickly escorted off the premises to a nearby restaurant. We were shown a nice brochure and given extremely favourable prices and I was excited about it all. But something didn’t feel right. Negotiations went on for some time and correspondence lasted for several days. All the while I was continuing to get an uneasy feeling………….. I ordered a car and driver and asked him to take us back to the factory where I expected, or hoped to meet the man I had met three days earlier. It seems nobody knew him and in fact the owner had been in Taiwan for over a week. This groups scam was trawl hotel lobbies looking to meet people who were new to China, make fictitious introductions and bribe security guards to allow them entry into factories. They would then put together deals, take the upfront payments and disappear with the money. Fortunately, on this occasion I didn’t get scammed, but came very close. Due to an outstanding legal issue I can’t go into to much detail about the next scam, but can tell you that I signed a lease on a factory I thought we would be moving into only to find that the ‘landlord’ didn’t own the building and I didn’t get my bond or the three months advance rental back. And this was done through solicitors……..?
Even when you get to meet genuine Chinese business people they tend to view you with the same skepticism that we view them. Establishing trust is extremely difficult. The Chinese have been exploited in the past and continue to be wary of foreign traders. Hence the need for introductions and ‘Guanxi’. To operate in China without it is impossible. Four years and 180 staff later and I am just beginning to establish ‘face’. I am building the new factory in cooperation with the equivalent of the local council and this has gone a long way towards cementing relationships for the future.
I will continue tomorrow with details of my first successful purchase.