There was an excellent article written by Jacob Yount called Red Flags in Chinese Manufacturing (found at
). In this article, Mr. Yount goes through 7 different red flags that any foreign company should be aware of in its dealings with a Chinese manufacturer. I felt that these 7 red flags were still relevant to doing business in China today, so here is a summary of his points.
1.
Unbelievably Good Pricing
– A price is unbelievably good when it is very different from all of the other quotes you have received. Most likely, this happens when the supplier has misunderstood the request.
2.
Quick Agreement to Tight Delivery Time
– If the supplier has quickly agreed to your request and has not given you any proof of how they will meet the deadline, be careful. Normally, a supplier will either barely make a tight deadline or will be a little late. So if they agree, but don’t tell you how they will make it, just be very careful.
3.
“We’ve never done this before”
– This is a very typical response that is meant to convey that the supplier is unsure about whether or not they can do what you requested. At the very least, it shows a lack of confidence that should be a warning sign.
4.
“It’s difficult” –
If your supplier keeps saying “it’s difficult”, it means that there have been some issues. “It’s difficult” is worse than “we’ve never done this before” because it is a conveyance of a problem, not a lack of confidence. Remember, the Chinese way of telling you bad news is not to tell you directly. Instead, it is to give you vague hints and hope that you fill in the blank
5.
No questions asked and no arguing
– If a supplier does not have any questions for you, then they are probably not really thinking about the project. This can lead to incorrect quotes and a lot of time wasted. If your potential supplier is arguing with you and asking a lot of questions, it means that they are really thinking about the request that you are making. This is actually a very good sign.
6.
Keep ignoring a specific request
– If you continuously ask a supplier to confirm a specific request and they keep ignoring you on that point, then it is a bad sign. They most likely don’t understand what you are asking or they just cannot do it. A non-confirmation is not a confirmation.
7.
Updates are few and far between
– If your Chinese supplier has suddenly stopped communicating with you, this is extremely bad. Most likely, this means that a problem has arisen and they don’t want to tell you until they absolutely have to tell you about it.