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Businessmen told to be cautious when doing business with Chinese
Vietnamese businesses prove to be too credulous; therefore, in many cases, they incurred complete losses in doing business with Chinese enterprises.
The trade with China makes up 14.7 percent of Vietnam’s total trade value. China is the biggest import market and third biggest export market of Vietnam, just after the US and Japan.
Credulity harms Vietnamese businesses
Thanh Hoa, an officer of a Chinese company operating in the field of trade promotion in Vietnam related that she knows a lot of cases, where Vietnamese businessmen incurred complete losses in the deals with Chinese businesses.
Most recently, the company, where Hoa’s sister is working ordered to purchase inox with a Chinese company in Guang Dzung. The general director of the company personally came to meet the partner and see the products.
As the general director felt satisfactory with the products introduced to him, he decided to sign the contract to purchase the products of the company, and paid a deposit. However, when the products arrived in Vietnam, the company found out that these were not the products they wanted. The Vietnamese company tried to contact the Chinese company, but it had no reply. It was obvious that the company deliberately delivered the wrong products to earn money.
“As I have close relations with Chinese businessmen, I tried to contact the Chinese company and threatened to take legal proceedings against it. After a lot of phone conversations and emails, the Vietnamese company finally could take back the deposit money,” Hoa said.
Hoa, who has seven years of experience in trade promotion, said that even though Vietnamese businessmen fly to China to meet the partners and see the sample products with their eyes, they still can fall into the traps of Chinese businesses. “Vietnamese businessmen would be easily fooled if they cannot speak Chinese or they work via interpreters who collude with Chinese partners,” she said.
Dao Ngoc Chuong, Deputy Director of the Asia-Pacific Market Department under the Ministry of Industry and Trade, said that many Chinese enterprises, which Vietnamese businessmen met at trade fairs, appeared to be very professional.
They have impressive stalls at the trade fairs and introduced very high quality products which could easily persuade Vietnamese businessmen to make deals with them. After signing the initial contracts, Vietnamese businessmen came to their production workshops to survey their production capacity. The offices seemed to be very big, while the stores were very large and there were a lot of workers, who all seemed to be very busy. Returning after the visits, Vietnamese businessmen signed official contracts and opened letter of credit (L/C) immediately.
“Vietnamese businessmen only realized the truth about the Chinese partners after they discovered that the products delivered to them by the partners were not the ones they ordered,” Chuong said.
After the failures in contacting the Chinese partners, Vietnamese businessmen flew to China again to look for the partners, and they realized that the production workshops they saw were just the rent ones, while the Chinese enterprises were “bogus enterprises”.
According to Chuong, he knows at least three similar cases, and the Vietnamese enterprises were all worked in the chemical production field.
In general, the contracts signed with Chinese partners include the provisions which may bring disadvantages to Vietnamese enterprises. For example, the Chinese side wants the disputes to be settled in China. In many cases, Vietnamese enterprises, due to financial capability, had to accept loss rather than spending money to settle disputes.
In fact, Vietnamese enterprises have been advised to check financial capability and status of Chinese partners. However, under the Chinese rules, only some special enterprises have the authority to provide the services. Meanwhile, Vietnamese enterprises would have to pay high fees when using the services
Chuong has advised Vietnamese enterprises to ask Chinese partners to show business certificates. “If the partners are serious businesses, they will not refuse to implement the request,” he said.
Pham Huyen
vietnamnet
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