Purchasing Article - Chinese Suppliers
REDUCING COSTS – AVOIDING CORRUPTION – PROTECT YOURSELF
FROM A SMALL CANADIAN BUSINESS PURCHASER PERSPECTIVE
This article is written as an eye opener for any small Canadian business who currently or is planning to purchase from a Chinese supplier from the main land China.
Shocking and revealing, this article gives a first hand look at what really happens across from the negotiation table.
This article is in the final stages of development. After completion I hope to have it printed in the B2B Purchasing magazine.
Pinching Hired Help - How the person you hire to assist in either finding suppliers, or negotiating deals can be looking at his/her interest first.
What you buy is not what you get - You approve of a product, purchase it. But what is shipped to you is not the same thing.
Why qualities and appearances change with the same product - You have purchased the same thing before, but its not the same as before.
What you see is not what you get - It looks good online, but totally different when you get it.
How Chinese companies produce authentic certificates of origin from other countries without the products ever leaving China. - Is it really just assembled in China?
How Chinese companies obtain legal customs certificates from foreign countries without the products ever leaving China. - Are the essential parts really from Italy?
How sometimes you can lose your entire deposit with a Chinese Company. - Its never a great price if you loss your entire deposit.
Why is it worth it for a Chinese suppliers to scam foreign buyers? Isn't repeat business worth having? - From their perspective there unlimited potential customers.
Click Read More for a list of:
Contacts for Chinese major news agencies:
Chinese anti corruption law, plus the official Supervision of the Central Commission for Discipline Inspection in China website where you can report corruption from a Provincial or Federal level.
Canadian Trade Commission in China contact list.
Contacts for Chinese Major News Agencies:
Sina News - http://news.sina.com.cn/
Sohu News - http://www.sohu.com/
ifeng - http://www.ifeng.com/
Guangzhou Daily - http://gzdaily.dayoo.com/html/2013-06/23/node_1.htm
Shanghai Daily - http://www.shanghaidaily.com/
China Daily - http://www.chinadaily.com.cn/
Global Times - http://www.globaltimes.cn/index.html
China News Digest - http://www.cnd.org/
Legal Daily - http://www.legaldaily.com.cn/
Peoples Daily - http://english.peopledaily.com.cn/
China's Anti Corruption Laws:
PRC Anti-Unfair Competition Law (AUCL)
ANTI UNFAIR COMPETITION LAW
|ANTI UNFAIR COMPETITION LAW OF THE PEOPLE'S REPUBLIC OF CHINA
(Adopted by the Third Session of the Standing Committee of the Eighth National People's Congress On September 2nd, 1993)
CHAPTER ONE GENERAL PROVISIONS
CHAPTER TWO ACTIVITIES OF UNFAIR COMPETITION
CHAPTER THREE SUPERVISION
CHAPTER FOUR LEGAL RESPONSIBILITY
CHAPTER FIVE SUPPLEMENTARY ARTICLES
|Chapter One General Provisions
|Article 1 This law is drawn up in order to safeguard the healthy development of the socialist market economy, encourage and protect fair market competition, prohibit unfair competition, safeguard the legal rights and interests of managers.
|Article 2 Managers shall abide by the principle of voluntariness, equality, impartiality, honesty and good faith, and also adhere to public commercial moral in their business transactions.
"Unfair competition", in this Law, means activities made by managers who damage the others' legal rights and interests, disturb the order of social economy and violate the provisions of this Law.
"Manager", in this Law, means the legal person, the other economic organisations and individuals who deal with commercial business or profitable service (commodities in this Law in hereafter as to commodity which includes service).
| 第二条 【基本原则】经营者在市场交易中，应当遵循自愿、平等、公平、诚实信用的原则，遵守公认的商业道德。
|Article 3 The governments in all levels shall adopt methods to prohibit unfair competition and to create the sound environment and conditions for fair competition.
The Bureaus of Industrial and Commercial Management of the People's Government over the county level supervise unfair competition, except for the supervision made by the other organisations in accordance with the provisions of the other laws or regulations.
| 第三条 【政府管理】各级人民政府应当采取措施，制止不正当竞争行为，为公平竞争创造良好的环境和条件。
|Article 4 The State shall encourage, support and safeguard all organisations and individuals to carry out social supervising for unfair competition.
Officials in the State organs should not support or shield unfair competition.
| 第四条 【社会监督】国家鼓励、支持和保护一切组织和个人对不正当竞争行为进行社会监督。
|Chapter Two Activities of Unfair Competition
|Article 5 Managers should not use the following unfair methods in their business transactions which can damage other competitors:
1. to feign the others' registered trade mark;
2. to use the specific name, package, decoration of the famous or noted commodities, or use a similar name, package, decoration of the famous or noted commodities, which may confuse consumers distinguishing the commodities to the famous or noted commodities;
3. to use the name of other enterprise or personal name and make people confuse this commodity to the other's commodity;
4. to feign or pretend to be the certificate of attestation, mark of fame and high qualification, to feign the certificate of originally produced place of the commodities, which make others to misunderstand the qualification of the commodities because of the false certificates.
| 第五条 【禁止仿冒】经营者不得采用下列不正当手段从事市场交易，损害竞争对手：
|Article 6 Public facility enterprises or the other enterprises which legally monopolized the special market in accordance with law shall not force the others to purchase the commodities pointed by the enterprises or prohibit the competition from the other companies.
|Article 7 The government and its organ shall not abuse its authority to force the others to purchase the commodities from the pointed seller or prohibit the fair competition from the others. The government and its organ shall not abuse its authority to prohibit outside commodities from going into home market, or prohibit domestic commodities from going to outside market.
|| 第七条 【禁止权力经营】政府及其所属部门不得滥用行政权力，限定他人购买其指定的经营者的商品，限制其他经营者正当的经营活动。
|Article 8 Managers shall not use money or properties or the other methods to bribe to others in order to sell or purchase commodities. It shall be guilty of giving bribe if managers give a secret commission to the other organisations or individuals without the normal accounting records. It shall be guilty of taking bribe, if the organisations or individuals accept the secret discount without normal accounting records.
Managers may offer a discount to the others in public, or may pay commission to the middle man in selling or purchasing commodities. However, managers who give discount to the others or pay commission to the middle man, or the others who take the discount or commission shall make accounting strictly according to the facts.
| 第八条 【禁止商业贿赂】经营者不得采用财物或者其他手段进行贿赂以销售或者购买商品。在帐外暗中给予对方单位或者个人回扣的，以行贿论处；对方单位或者个人在帐外暗中收受回扣的，以受贿论处。
|Article 9 Managers shall not use advertisement or the other methods to make a false propaganda for the quality, composition, function, usage, producer, time of efficacy and place of production of commodities.
Advertising company shall not be an agent of, or design, or make, or propagandize false advertisement, if it know or should know the truth.
| 第九条 【禁止虚假广告】经营者不得利用广告或者其他方法，对商品的质量、制作成分、性能、用途、生产者、有效期限、产地等作引人误解的虚假宣传。
|Article 10 Managers shall not use the following methods to infringe upon business secrecy:
1. to steal, coerce, or use any other unfair method to obtain the other's business secrets;
2. to disclose, use or permit others to use the business secrets mentioned in Section 1 of this Article.
3. to violate the contract or the requirement to publish, use or permit others to use the business secrets, which were maintained as secrets by the legal owner of the business secrecy.
The third party who knows or should know the illegal activities as first mentioned, and who gains, uses or publishes the business secrecy shall be looked as activities of infringing upon the others' business secrecy.
"Business secrecy", in this Article, means the utilized technical information and business information which is unknown by the public, which may create business interests or profit for its legal owners, and also is maintained secrecy by its legal owners.
| 第十条 【禁止侵犯商业秘密】经营者不得采用下列手段侵犯商业秘密：
|Article 11 Manager shall not sell commodity at the price lower than the commodity's cost in order to put the other competitors out of the competition.
Any of the following activities shall not be looked as unfair competition:
1.to sell fresh or live commodities;
2.to quickly sell commodities before their expiration or the other overstock commodities;
3. to cut prices or on sale in season;
4. to cut prices to sell commodity for cleaning debts, changing or suspending business.
| 第十一条 【禁止倾销】经营者不得以排挤竞争对手为目的，以低于成本的价格销售商品。
|Article 12 Manager shall not sell commodity attached with unreasonable condition or force the consumers to unwillingly purchase any additional commodity that come together with the product that the consumer buys.
|Article 13 Manager shall not sell commodity with lottery ticket such as the following activities:
1. to sell commodity by the way of making fake award or arranging inside person to win the lottery;
2. to sell unqualified or high prices commodity by the way of awarding selling;
3. to sell commodity with lottery award which the top award is more than 5000 RMB yuan.
| 第十三条 【禁止不正当有奖销售】经营者不得从事下列有奖销售：
|Article 14 Manager shall not fabricate, spread false facts to damage the business reputation or commodity fame of the other competitor.
|Article 15 Bidder shall not act in collusion for bidding, not raise or reduce the price for bidding.
Bidder shall not collude with the company that is offering to bid in order to put the other bidders out of the competition.
| 第十五条 【禁止串通投标】投标者不得串通投标，抬高标价或者压低标价。
|Chapter Three Supervision
|Article 16 The supervising authority over the county's administration may carry out the supervision to activities of unfair competition.
|Article 17 The supervising authorities has following powers in the supervision:
1. Require manager, connected person, testified person in due process and require them to supply testified material or the other documents with regarding to activities of unfair competition.
2. Require, copy agreements, accounting books, vouchers, documents, records, business fax or letters and the other materials with regarding to the activities of unfair competition;
3. Check commodities or properties with regarding to the activities of unfair competition under the provision of the Article 5 of this Law, and also if necessary, require manager to explain the originated source and sum of the commodities, to suspend selling, to wait for checking, prohibit to move, hide or eliminate the commodities or the properties.
| 第十七条 【监督机关职权】监督检查部门在监督检查不正当竞争行为时，有权行使下列职权：
|Article 18 Supervisor shall show the certificate of supervision when he carries out the supervision to activities of unfair competition.
|Article 19 Under the supervision of the activities of unfair competition, manager, connected person and testified person shall supply the related materials or information strictly according to the facts.
|Chapter Four Legal Responsibility
|Article 20 Manager shall bear the responsibility for compensating to the damage made by damager to the damaged party under the violation of the provision of this Law. Amount of the compensation shall be equivalent to the profit made by the damager during its damaging, if it is difficult to measure the amount of damage; And it also shall compensate the reasonable cost to the damaged party who has paid the cost to investigate the activities of unfair competition made by damager.
The damaged party may bring law suit to the People's Court when its legal interests and rights are damaged.
| 第二十条 【损害赔偿责任】经营者违反本法规定，给被侵害的经营者造成损害的，应当承担损害赔偿责任，被侵害的经营者的损失难以计算的，赔偿额为侵权人在侵权期间因侵权所获得的利润；并应当承担被侵害的经营者因调查该经营者侵害其合法权益的不正当竞争行为所支付的合理费用。
|Article 21 Manager shall be punished in accordance with the Law of Trade Mark of the People's Republic of China and the Law of Supervision on Product Qualification of the People's Republic of China, if he imitates the other's registered trade mark, uses the other enterprise's name or personal name without permitting, forges or fake the mark of certificate, the mark of famous or high quality products, fake the original produce place, make a fake or misunderstanding description for quality of the products.
The supervisor shall order to stop the illegal activities, confiscate the illegal income, and also fine amount from one to three times of the illegal income; may revoked the business licence as the facts is serious, if the manager uses the special name, package, decoration of the famous or noted commodities or uses the similar name, package, decoration to that of the famous or noted commodities and make the commodities confusing to the famous or noted commodities. If manager sells false or bad commodities and violates the Criminal Law, he shall be investigated in accordance with the Criminal Law.
| 第二十一条 【假冒标识行为的法律责任】经营者假冒他人的注册商标，擅自使用他人的企业名称或者姓名，伪造或者冒用认证标志、名优标志等质量标志，伪造产地，对商品质量作引人误解的虚假表示的，依照《中华人民共和国商标法》、《中华人民共和国产品质量法》的规定处罚。
|Article 22 Manager bribe by giving money or properties or using any other method in order to sell or purchase the commodities and violate the Criminal Law, shall be investigated in accordance with the Criminal Law; if the acts as first mentioned do not violate the Criminal Law, the supervisor may fine an amount from more than 10, 000 to less than 200,000 RMB yuan in according to the facts,and confiscate the illegal income.
|Article 23 Manager of public facility enterprise or the other enterprises with a legal monopoly position force others to purchase the commodities which the manager manages, or put the other managers out of competition, the supervisor in the provincial or city with directions administration shall order to stop illegal activities, and may fine amount from more than 50,000 to less than 200,000 RMB yuan in accordance with the facts.
The supervisor may confiscate illegal income, and may fine amount from one to three times of illegal income, if the pointed manager take an advance to sell the unqualified and high price commodities or abuse of power to charge unreasonable fee.
|Article 24 The supervisor shall order to stop the illegal activities, clear up the bad influence, may fine amount from more than 10,000 to less than 200,000 RMB yuan in accordance with the fact, if the manager uses advertisement or the other method to make a fake or misunderstanding description for its commodities.
Supervisor shall order to stop the illegal activities, confiscate illegal income and fine in accordance with the law, if the manager in advertisement agent, design, make or publish a fake advertisement as it knows the true situation.
| 第二十四条 【虚假广告行为的法律责任】经营者利用广告或者其他方法，对商品作引人误解的虚假宣传的，监督检查部门应当责令停止违法行为，消除影响，可以根据情节处以一万元以上二十万元以下的罚款。
|Article 25 Supervisor shall order to stop the illegal activities, may fine amount from more than 10,000 to less than 200,000 RMB yuan, if manager violates the Article 10 to infringe upon the business secrecy.
|Article 26 Supervisor shall order to stop illegal activities, and may fine amount from more than 10,000 to less than 100,000 RMB yuan, if manager violate the Article 13 in regarding to sell with lottery.
|Article 27 If bidders act in collusion, raise or reduce the price of the bid; and bidder and invite tender ganged up in order to put the others out of the fair competition, its bid shall be invalid and the supervisor may fine amount from more than 10,000 to less than 200, 000 RMB yuan in accordance with the facts.
|Article 28 If the manager violate this Law regarding to the order to stop selling, moving, hiding, eliminating the commodities related to unfair competition, the supervisor may fine amount from more than one to less than three times of price of commodities regarding to selling, moving, hiding or eliminating as first mentioned.
|Article 29 If the party refuses to accept the fine decision made by supervisor may apply the senior supervisor to reexamine the case within 15 days from the date when the fine decision was received; If the party who refuses to accept the decision of reexamine made by the senior supervisor may bring a law suit to the People's Court within 15 days after the reexamined decision received; or the party may bring a law suit to the People's Court directly.
|Article 30 If the government or its departments violate Article 7 of this Law to force the others to purchase the commodities from the pointed manager, limit the others make a fair competition, or limit commodities to transfer between regions, the senior government shall order to correct these mistakes; If the fact is serious, the same level government organ or the senior government organ shall administratively punish the person who bear the direct responsibility. The pointed manager take advance to sell commodities with unqualified and high price, the supervisor shall confiscate the illegal income, and may fine amount from more than one to less than three times of illegal income.
|Article 31 Official of the supervisor of unfair competition who abuse of power, negligence, commit on criminal guilty shall be punished by the Criminal Law; If not guilty, it shall be punished in accordance with administrative regulations.
|Article 32 Official of the supervisor for unfair competition shall be punished by the Criminal Law, if he is fraudulent, or illegally shields the manager from the legal punishment even though he knows he fact of the manager's crime.
|Chapter Five Supplementary Articles
|Article 33 This Law shall become effective on December 1st, 1993.||第三十三条 【生效日期】本法自１９９３年１２月１日起施行。|
If you can prove, or even suspect that you are getting scammed, I provide the direct contact for both the provincial and federal levels of the Supervision of the Central Commission for Discipline Inspection in China.
These contacts are the official Chinese government contacts to report corruption.
Supervision of the Central Commission for Discipline Inspection: http://www.12388.gov.cn/
The website acts like an online form. Google translate will translate most of the Chinese characters. The below Character is the Accept online button that you must click first to accept their policies before you can use the online forum to report your report, and provide all of your personal information. There is a count down that must be finished before you can click it.
Canadian Trade Commission in China: http://www.tradecommissioner.gc.ca/eng/offices-china.jsp?cid=512
As quoted from their website:
The Canadian Trade Commissioner Service (TCS) will provide you with on-the-ground intelligence and practical advice on foreign markets to help you make better, more timely and cost-effective decisions in order to achieve your international business goals.
The mandate is to promote Canada's trade and economic interests in China. We support the efforts of Canadian companies who have selected China as a target market for their products, services or technologies. We also offer our Chinese clients assistance regarding investment and trade opportunities in Canada and will match their sourcing needs with the appropriate Canadian products and services.