roadguy

I'm going to various Southern parts of China soon for our own business. As you may be able to tell from the title I do not know any Chinese. I have read the tour guide stories and quite frankly do not want to get formal tour guides involved between the factories and ourselves as we have had bad tour guide experiences in other countries (kickbacks, etc...). Bottom line, is it workable for an adventourous, patient individual with a great sence of humor to navigate his way into and out of various cities. Also, with a little ingenuity will the factories be easy enough to locate? We just are really against tour guides as our typical transactions will easily involve over 10k USD due to the type of products we are seeking and the volume we will need. Kickbacks can make a huge negative impact to our overall bottom line. Thank you in advance and I have found the info on this site to be very helpful (especially yours, Peter).

jason888

I would say that what you are proposing to do is pretty impossible, without speaking the language.

If your concern is not being "taken" by tour guides, then you should be concerned about being "taken" by the local manufacturing unit.

You need someone reliable who will negotiate - in Chinese - for you. Import-export trade in China is VERY complicated. E.g., how are you proposing to get your products out of China? There's a tangle of official papers...

If I were you, I would work with a savvy company in Hong Kong and have them do all the up front work. Then you can go into South China or North China to visit factories, etc. to check and see if those products are the ones you want. There are lots of independent scam artists in China, just as anywhere else.

This whole thing sounds like you are setting yourself up for a fall. Sorry to be so negative, but I'd hate to see you lose money...

Patty

Have you already located the factories that you'll be visiting? Have you been in contact with them by email or fax? I don't think there will be a language problem as any factory that exports their products will have someone capable of communicating with you in English. Negotiation in English is not a problem as long as you know in advance what the fair price is. We do a fair amount of importation from China and although we do have Chinese speaking staff, most of our fax and email communication is in English. If you set up your meetings in advance, that should take care of the transportation part too (not that you couldn't do this on your own). It's not necessary to work with a broker in Hong Kong who will also take their cut, the same goes for anyone locally who negotiates on your behalf. As far as shipping goes, any factory that exports their products will know what needs to be taken care of from their end. Clearly establish what the terms of shipping will be, who pays for what, whether it is FOB factory or will they pay for inland freight to Hong Kong and you're responsible from that point on (of course that gets added to the per unit price but they may be able to contract for inland freight at a price that's lower that what your freight forwarder would charge) Shipping can be arranged by any U.S. freight forwarder who handles imports from Asia. If you do not already use one, contact a few in advance and find out the costs from various points. The one thing I would be concerned with is quality control. Since you will not be on site and will not have a local representative available for pre-shipment inspection, this could potentially be a problem. Quality is going to vary tremendously and what you're shown on your factory tour may not be indicative of the quality of the products you will receive. It's best to get some reference/referral from those in your industry. Although this may be complicated due to either reluctance to share sources or the person doing the referring establishing some sort of kickback with the factory. Establish a payment schedule in which you can hold back a portion of the payment until after your products have arrived and you have inspected them. We routinely have to reject a certain percentage of the products we receive and this percentage varies with each supplier. If you don't have credit already established with another local factory, they may be reluctant to ship anything without receiving at least a partial payment or letter or credit. With a few hurdles it can be done and I think you should do a little pre-trip planning.

roadguy

Thank you for your response, they are both quite helpful although one seems to have the cup half full and the other half empty. I failed to mention that we are currently importing some items from China already however most of our contacts have been via trading companies which of course take thier more then fair cut. I'm aware of the towns that our items are manufactured in and also have company names and addresses. I suspect that if a particular company that manufactures for instance leather is in town X then there are probably 10x (maybe 100x) more companies in the same town who produce similar products. In short, I'm concerned that by having a manufacturer rep meet us then we will be narrowing our selection process and ultimately could be reducing our margins. Please let me know if my thinking is completely whacked but in a country like China I figured the manufacturs won't mind at all if an exporter shows up at the doorstep. As far as the logistics from China to our doorstep we have freight forwarders to handle that for us (although we will also negotiate the inland freight).

The types of products that we will be exporting are consumer type goods which we are already experienced with.

My main concern is, are the factories (not the retailers) accessable enough to make this 19 day trip workable?

Thanks again in advance.

imagebilly

It is possible. However, there are a few caveats.

The factories in South China tend to group around certain second-tier cities such as DongGuan, ChangAn, TaiPing etc. But you will want to stay in a big city like ShenZhen or GuangZhou (for food, night life and fun) and make day-time trips to the factories. Hence you will need a chauffeur-driven car (with 200 bucks a day you probably get a Mercedes). The problem is that the chauffeur usually don't speak good English so you need someone who can communicate to him where you wanna go. Besides that, the trips to the factories can take hours and you'd get bored yourself alone in the car.

If you are indeed an "adventourous, patient individual with a great sence of humor", you can try the following,

1. Book into a nice hotel in ShenZhen (the most convenient city for factory tours, and Hong Kong is just across the borders). Shang-ri La, Forum or the new Crowne Plaza are nice ones.
2. Go to the hotel frontdesk manager asking her to find a chauffeur and a car for you. (If you stay in Shang-ri La, go to its Henry J. Bean's bar in the night and ask the male bartenders to do this for you. I'm not joking - they probably will do better than the frontdesk managers.) This is not their normal job but they generally will be happy to help you personally so when you talk to them don't be too business-alike. You will also ask them to find a friend to be your interpreter for the trips (for this you need to negotiate a day rate but you can try to ask for a nice girl!)
3. Your next a couple of days probably will be wasted as those people will need time to find the car, the chauffeur and the interpreter for you. So spend your time figuring out where you want to go.
4. Once you've got a car, a chauffeur and an interpreter, here you are on the road - the rest is just a piece of cake.

Of course there is a risk that you could spend days trying to sort out the above. But hey c'est la vie - you said you are patient.

The good news is that you actually don't need 19 days to visit the factories. In 1996, I did 50 factories in 4 days. How many do you think you want to visit?

Patty

Have you already contacted a few companies directly and are these the same ones that are currently supplying the trading company that you purchase from? If so, the one advantage is that you already know the quality factor. Also even if you do pre-arrange a few meetings, you are certainly not limited to only visiting those companies. Your assumption that if there's one company manufacturing a certain product then there are 10x more doing the same in the surrounding area is for the most part correct. The product that we import can also be considered a 'consumer type good' but is somewhat specialized and we only purchase products that utilize a specific manufacturing process. At this point, it's a relatively new manufacturing process in China so there aren't hundreds of companies from which we can select. However, I'm assuming that you are talking about something a little more common. A 19 day trip is certainly workable and probably longer than what most people spend doing the same. There are a few holiday periods where most factories shut down for a week or longer. The length and exact days vary each year and from factory to factory but they are generally the labor holiday (beginning of May), national holiday (early October), and Chinese new year (varies quite a bit but generally end of Jan to Feb) so those are the periods to avoid if you want to see things in production.

PeterN_H

I think your method of arranging transport should be quite different from the ones suggested above (1996 was a very long time ago). Five-star hotels indeed often ask Y1600 ($200 or so) for a car for the day, and doormen and bar tenders can see you coming, so although you may get a lower figure from their uncle/cousin/friend's next door neighbour or even from the hotel's own pool of cars via the back door, it will still be much higher than you need to pay, and you'll have precious little come back if something goes wrong.

The simplest method is to take an aircon taxi for the day, and far from taking a day or two to set up, you can get one instantly. You should end up paying a third of hotel prices at the most.

The best policy, however, is to have the destinations you want to visit written down in China, and to stop taxis (away from the hotel, not waiting in line there) the previous evening. Either negotiate a flat price (Y400 to Y500 in Shenzhen, although first asking prices will be much higher), or if you fail at this simply use the meter but insist that the one way button is not pushed as this will increase the km rate posted on the side of the cab by 50% after only a few kilometres. However, be aware that the driver will probably get lost a few times and have frequently to ask for directions (this would be true of a hotel car, too), so a flat rate is a better incentive for him to do a bit of homework and not mess you about.

Peter N-H
http://members.axion.net/~pnh/China.html

Patty

Even if you end up choosing the car/interpreter route, it should not take several days to sort this out. This is a pretty standard request.

Cicerone

With all due respect to the advice you have received so far, I don't think you should be seeking this type of advice on this site. People here are travellers, and can't really give you adequate information about import-export regulations and practices. Doing business in China is difficult even if you speak the language, and the level of corruption is disappointingly high. For example, using a local tour may not be sufficient for your purposes, as he or she may not have adequate English or local dialect(s) to correctly explain your needs and specifications.

If you are a US citizen, you should contact the Commercial Service unit at the US Consulates in Hong Kong (www.hongkong.usconsulate.gov) and Guangzhou (usembassy-china.org.cn/Guangzhou, as well as the US Commercial Service generally at the Commerice Dept at www.buyusa.gov/china/en. While their primary purpose is to promote US exports, they also assist US citizens wanting to do business in Hong Kong and the PRC. They may be able to help arrange for a guide and/or interpreter and should have other business contact information.

Also try the American Chamber of Commerce in Hong Kong at amcham.org.hk. Am Cham is very large in Hong Kong and should have information and/or contacts for guide and or interpreters targeted to your type of business. Your city may have a Chamber of Commerce with links to Hong Kong, esp San Francisco and other west coast cities.

If you are not a US citizen, then contact your consulate in Hong Kong. There may also be a HK Chamber of your country's chamber of commerce.

The above advice about getting connected with a local agent is also very good, and I would think that agent would set up all the transport and factory visits, at NO charge to you, it will all come as part of his fee, which should be a percentage of what you buy.

jason888

Cicerone has given you the best advice so far.

It sounded from your original post that you were just going to drop into China out of the pure blue sky with "a good sense of humor" and "patience" and not speaking a word of Chinese! Those aren't exactly ingredients for successfully doing business in China. I apologize if I misunderstood you.

The Chinese, and the Japanese even more than the Chinese, want to negotiate in detail. That is, the honest to goodness business people do. Shady deals are the quickie ones (as they are probably anywhere on earth, unless it's CEO shaking CEO's hand). The Chinese want to make sure they provide you with what you want - so you have to spell out the height, width, length, thickness, color, etc. etc of what you want, else you are going to end up with "substandard" goods. Of course, if you get better quality goods, you never complain...but whether sub or better, it shows a lack of attention to spelling out your exact needs. And for this kind of detailed discussion of what you propose to buy and what the Chinese propose to sell, you need not just someone who can speak Chinese but someone who does business in China.

The advice to seek out the U.S. Commercial Officer is an excellent one. I have found the ones I've used or spoken with to have excellent knowledge and are usually a cut or two above your usual consular officer.

Any discussion about tour guides is irrelevant for your purposes. You need a trade agent, not a tour guide. These are apples and oranges.

And as for saving money negotiating better deals at hotels or with taxis, it's a matter of priority. What are you going to China for? If it is to buy things to sell at home, then I would focus on setting up your contacts first and foremost. You need to do a lot of work beforehand and the better your contacts and your agent, the more you will save when negotiating your purchase-sale agreement. Compared to this type of savings, what you save on hotels and taxis will be negligible - apart from it being a monumental waste of your precious time in China...

Good luck! China is a big country and will probably have whatever it is you want, just get a good agent to sniff them out for you, preferably before you go to China!

Patty

From what I understand of roadguy's posts, he's already working with an agent/trading company and he's already buying his products this way. What he wants to do is purchase directly from the factory bypassing the agent's cut. If he simply goes thru a different agent, then that kind of defeats the purpose of what he's trying to accomplish and he can save himself a trip to China and just continue doing business as is.

It also sounds like he's familiar with import regulations on his end. As far as export regulations on the supplier end, any factory that's currently exporting goods is familiar with the export regulations and it's their responsibility to have this documentation processed if they wish to export their goods. As a direct importer the only thing that we need to do on our end is make sure they deliver the goods to our freight forwarder. I'm not saying that there won't be new hurdles or difficulties in going direct or that one method is better than the other. Just as everything else, it's a decision between paying more money for service and convenience or paying less money and doing more of the legwork yourself. It seems that roadguy's at a point where he wants to try this latter route.