For this situation, I don’t think there could of been a legally scripted solution to prevent this.

Like how most of these romance stories began, it was when the Buyer met the Supplier at the fair. A trade show fair that is …..

Something I should point out is, the product here is particularly specialized and the supplier is one of the biggest in China.

Unfortunately I have to keep it vague but it basically goes like this:

-Buyer meets supplier at fair

-Supplier sells a sample to buyer to approve

-Buyer approves sample and wants to start first order

-Supplier refuses to sell sample, as product is being sold to another customer in same country

-Buyer dumbfounded

-Supplier offers a “better and newer” product to buyer, yet still reluctant to sell this, but eventually does

-Buyer knowing holiday is coming up, flies to China to solidify the deal

-Buyer is hoping the new sample will be sent to home office to be approved before they arrive to China for meeting ….. but isn’t

-Buyer and supplier meeting again, supplier now will sell product and the originally approved sample

-Buyer still needs to approve the sample flying over the Pacific sea.

-Happily ever after?

Yes, an over simplified version, but it gets the point across.

Just looking at the story, it makes one cringe at the thought of doing business in China. It looks over complicated, unreliable, down right frustrating. Why did this all happen? Why so complicated? Why so much time and money wasted? Sometimes these questions can not be answered. Moreover, searching for these answers is not important. What is important is, getting what you need and finding out how.

Capitan Obvious’ observations:

Chinese mentality: Cautious, slow approach

Western mentality:  Time-line driven

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Chinese mentality: Indirect

Western mentality: Direct

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Chinese mentality: Willing to wait

Western mentality: Willing to compromise in lieu of waiting

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With all this being said, the beat of business is not done to the same drum. Also, the pace of commerce in the US is based on speed. For a lot of purchasers, they simply do not have the time to jump the hoops of relationship management and supplier development. It just does not exist the same way it does here. Therefore, they are locked into a system and working with China becomes confusing and frustrating.

For Chinese companies, working with foreign companies is frustrating. Relationship management is almost non-existent, business conduct is completely different. It is something that both sides have to deal with.

Again, what is the scripted answer?  I would venture to say there is none. The key to success here is, understanding your surroundings and situation. Preventative home work goes a long way in China and if you are doing business here it won’t solve all the headaches but it will make you more prepared for them.

In this economic climate, the world is using its old tricks again. In the recent Xinhua article, they explain a current anti-dumping investigation against China by the European commission.

First, what is dumping?

Dumping is when a company exports a product below the market price. In the claim above, the European Commission is starting an anti-dumping investigation against companies in China selling:

Steel wire rods

Seamless pipes

Sodium Gluconate

Road wheels

Anti-Dumping measures result in tariffs and duties on the product to raise the price to a reasonable market price. This all a very simplified explanation.

As I said in the beginning, in the current economic climate, the world is looking for ways to protect their country’s interests. An anti-dumping measure is definitely one way.

Stuart Newman, who is a legal advisor for the Foreign Trade Association representing EU importers comments:

“When we experience a financial crisis, we can assume there will be more requests for anti-dumping investigations from manufacturers,” he said.

The investigations do not automatically result in high duties for imports in the long run, Newman said, but they do increase the cost of imports and expenses for consumers.

“Although companies may not increase the prices of their products immediately, they have to swallow the cost, reducing staff and imports,” Newman said.

America is no golden child in this arena either. An interesting paper titled, Unfair Play: Examining the U.S. Anti-Dumping ‘War’ Against China, Francis Tanczos gives some scary statistic about how many case have been directed at China.

Due to the large volume of its exports, it is of little surprise that China has been the primary target of anti-dumping measures. The sheer number of anti-dumping cases against China has made it apparent that China is perceived as a threat to many other WTO members: over the past two decades or so, more than 30 countries have opened about 600 anti-dumping cases in the WTO against 4000 different types of Chinese products. Over this same two-decade period, the US had made 110 petitions and 68 orders against Chinese goods topping the list among the US’s trading partners for such measures. Currently, 25 percent of all WTO anti-dumping investigations are directed at China.

Is China playing unfair or are other countries trying to protect their economy by any means? I think it would be unfair to claim one or the other. There is truth on both sides of the matter. On one side, a lot manufactures are playing unfair with lower priced goods. On the other side, a lot of countries just use this measure as protectionism for their country’s industry.

There are no angels in this game, but we are locked into a “race to the bottom” for goods. The more communities’ desire for something, the more variety and pricing structures will appear to fill markets. A trip to the local mall will make this pretty clear. Meanwhile, to produce those same goods in your home country would result in less variety and be very expensive to the end user. It is an interesting conundrum we are in.

Free market or regulate the hell out of it?  In the wise words of Bart Simpson:

Ms. Mellon: Bart, what other paradoxes affect our lives?
Bart: Well… you’re damned if you do, and you’re damned if you don’t.

Well said…