Buyer Beware

Published on March 3, 2010 by JonT | This story has been viewed 533 views

Buyer Beware

Almost daily, I receive complaints about companies or manufactures in China that has accepted money and have either sent out bad/wrong products or has not sent anything except excuses. Especially now, as current economic strains tug at the very core of business survival, some are resorting to less than honorable means to survive the financial crunch.

There is very little recourse for foreign complaints in China and sadly the burden of proof is almost always on the shoulders of the party that has been cheated. You could hire a lawyer and go to arbitrations, no matter your course of action it would most undoubtedly be more costly that your initial investment. With conservatively less than 40% (my experience) chance of recovery it’s better to put your efforts in staining the cheating company’s reputation (face). Remember, before pointing fingers think of what could have gone right with a little common sense.

Threatening to sue doesn’t carry the same weight as in the West. China is not a litigious society where most of all its disputes are resolved outside the official system. Thus, they might not take your threats seriously. In China, threats are sometimes used to receive face or something other than monetary. Even if you did win a court battle, you would have the satisfaction of being the victor but would eventually realize that your winnings are a bit more or more realistically far less than you put in.

Each case is considered and outcome decided on its own merits. There is no such thing as precedence here. Consider this; in 2008 Global music conglomerates such as Sony BMG, Universal Music, and Warner Music lost to Baidu.com (solely Chinese Owned) over facilitating copyright infringements with its MP3 download search service. Then recently Yahoo, China (which is owned by Alibaba but has 40% ownership from Yahoo, USA) was sued for the same infringements by the same conglomerates. Slam dunk right? They lost; settlement was for over $700,000 in damages. Which is far less than if this suit were held in the west? That’s roughly $50,000 per company suing, total of 11 companies less court and legal fees. Was it worth it? Where is the precedence? Are we comparing Apples to Oranges or preferentially treated Fuji Apples over Washington Apples. The only thing consistent in Chinese Law is inconsistency. It always comes down to who you know and what’s in it for me. However, they are making great strides and improvements.

The only recourse that will get you results is persistence. Smear campaigns is costly and could get you in trouble. Go on all the B2B websites and leave posts. Go to your Chapter’s Chamber of Commerce for guidance. File a complaint with the China’s local police station and get a police report number (depending on the severity and amount of loss). Finally, you can either hire an agent that will act as your mandate (of course taking a percentage of the money recovered) or you yourself keep calling. Eventually even the thickest mountains of China get worn away to dust by constant gentle winds (your voice).

–By: Jon Trewyn

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Filed under: Shenzhen