China Trading Concerns
NZTE concerned about China trade enquiries
New Zealand Trade and Enterprise (NZTE) has become increasingly concerned about several cases of deceptive business practices in parts of China in recent months.
NZTE is aware of companies from around the world (including a number of New Zealand companies) that have received trade enquiries and draft purchase contracts for products and services from Chinese companies.
Enquiries have been received across a number of industries and have originated from destinations in China that include Wuhan, Shenyang, Henan and Anhui, but are not confined to these cities and provinces.
A number of these enquiries are from Chinese buyers looking to import the New Zealand company's products and/or services and inviting the potential exporter to visit them to sign contracts. A key feature of the enquiries is that the companies want to place large orders, claiming to focus on quality not price, and agreeing to all general terms of trade. Chinese companies have also asked for expensive gifts for relationship building purposes and once the gift is given there is no further contact and calls are not returned.
Following on from an alert late last year, NZTE strongly recommends New Zealand companies do some of their own due diligence to verify who they are dealing with, bearing in mind the old adage – “if it looks too good to be true, it probably is”.
NZTE also suggests New Zealand businesses insist on the Chinese company providing a copy of their business licence and ask for references from other companies they have dealt with in New Zealand and internationally.
It is important to note that only a small percentage of trade enquiries from China are of this nature. A majority are genuine trade enquiries that do not make unrealistic demands. NZTE is able to commission a report on the Chinese company if New Zealand exporters believe the trade opportunity is genuine and want to follow up independently.
New Zealand companies seeking further information should contact NZTE China Market Manager Pat English, email pat.english@nzte.govt.nz.
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