In most cases, importers don't need to worry about the way their supplier handles the VAT rebate. They are usually better off negotiating a price under the FOB incoterm and avoid worrying about the complex paperwork involved in getting a rebate on the VAT paid on components/materials. However, once they start looking deep in their supply chain, they can identify risks as well as opportunities for saving money. And they might notice that their supplier pockets a margin much higher than they … [Read more...]

I just read a good article in this week's Week In China on the topic of counterfeit goods. It starts by reminding us of the regular accusations of big brands against Alibaba. Last May, brands led by Michael Kors, Gucci and Tiffany resigned their International Anti-Counterfeiting Coalition memberships after the board proposed Alibaba for membership, forcing that body to back down. Alibaba's boss, Jack Ma, responded to this and tried to use it for a specific purpose. Ma says the criticism is … [Read more...]

Dan Harris wrote a pretty good overview of the risks of paying an individual as a sourcing/QC employee in China. He relates a recent change he noticed. (On our side, we also heard that controls on incoming flows of money have gotten much tighter over the past 2 months.) China banks (owned by the Chinese government) are providing information to China’s tax authorities regarding account-holders who consistently receive money from foreign companies. China’s tax authorities are apparently going … [Read more...]

Note: all free coupons were used up. But we still got some coupons at 50% discount. If you import products from another country, you should be aware of the regulations that apply to those products. Chances are, your country's authorities will consider you as the manufacturer (since you have put that batch on the market) and will go after your company if they find some irregularities. Large companies know this well and have systems in place to ensure they are (mostly) covered. The problem is, … [Read more...]

Fredrik Gronkvist is a co-founder of Chinaimportal, a company that helps small businesses import from China through supplier identification & verification services. A part of Fredrik's offer is to help importers understand what regulations and standards they need to comply with. in this Q&A he is sharing his experience about the European Union's requirements. Q: Importers who buy products from China want to be “in compliance”. What does this involve? A 'Compliant product' adheres to … [Read more...]

Dan Harris just published advice to exhibitors that showcase their own new product designs. In his words: It should go without saying that you should not reveal anything more at a trade fair than you would otherwise, and you should have an agreement in place (an NDA or an NNN) before revealing any trade secret. This is good advice, but not always sufficient. I think this is a case where non-legal strategies are far, far more effective. Many people walk trade shows with fake name cards. And, … [Read more...]

A client called me and asked my advice regarding an uncomfortable situation. One of his long-time suppliers, a manufacturer in Zhejiang, just announced they had gone bankrupt and had stopped all activity. My client has wired a 30% deposit for an order that is currently finished, packed, inspected, and accepted for shipment. But that order is not leaving the factory’s warehouse. The manufacturer’s contact person tells my client the situation is “difficult”. What does the situation look like, … [Read more...]

There has been a mounting concern about the role of e-commerce platforms in the distribution of fake products. For example, two years ago I wrote Does your China factory sell your products on Taobao.com?. And it seems like the situation is getting better for owners of intellectual property rights. Yesterday I attended an interesting European Chamber seminar that was chaired by Chris Bailey from Rouse, a global agency specializing in IP rights monitoring and protection. Mr. Bailey informed us … [Read more...]

A few weeks ago, I met with Elisabeth Bourgeois, who is based in China and specializes in brand protection & anti-counterfeiting. She is the managing director of Bourgeois & Yang and is a member of the European Union Chamber of Commerce in China. Elisabeth accepted to answer a few questions about intellectual property risks for importers: Q: Let's say a European or American company needs to produce in China. They have their own brand, and they develop their own products. What are the … [Read more...]

A few days ago, I was invited to speak in a seminar organized by the European Union Chamber of Commerce in China. The topic was "How to collect payments from Chinese suppliers". The first speaker was Javier Hernandez, a lawyer based in Beijing. From his presentation, I realized the main source risk factor is the fact that many Chinese suppliers don't follow what is considered normal business practice in the West. Here are three examples that are very, very common. Surprisingly, most purchasers … [Read more...]