1. Cultural and communication barriers
Problem: Due to differences in cultural background, business habits and language systems, foreign businessmen are prone to misunderstand Chinese body language and expressions in business negotiations. There are problems in language communication, such as misunderstanding of professional terms and dialect accents, resulting in low communication efficiency. For example, if you don’t understand Chinese toasting culture, you may be misunderstood and unfriendly.
Solution:
Participate in professional Chinese culture and business etiquette training before purchasing, and Chinese enterprises take the initiative to introduce cultural habits to foreign businessmen.
Hire a professional translator or use high-quality translation software, and establish regular video conferences, emails and other communication mechanisms.
2. Differences in laws, regulations and policies
Problem: China’s laws and regulations on trade, taxation, intellectual property protection and other laws and regulations are very different from those of the countries where foreign companies are located, and foreign businessmen are prone to incomplete procedures and declaration errors in the customs declaration and clearance process due to their lack of understanding of import and export tariffs, customs supervision, product quality standards, etc., resulting in detention or seizure of goods; Intellectual property rights are not protected in a timely manner and are vulnerable to counterfeiting.
Solution:
Entrust professional law firms and trade consulting companies to assist in understanding laws and regulations and handling relevant procedures.
Pay attention to the official websites of the General Administration of Customs, the Ministry of Commerce and other official websites and industry associations, and participate in policy interpretation meetings and training.
Third, product quality and standard issues
Problem: The level of Chinese suppliers is different, and foreign investors lack experience in screening and quality control, so it is easy to purchase products that do not match the samples and the quality is not up to standard; In addition, Chinese and foreign product quality standards are different, and Chinese suppliers may not be familiar with the certification standards of the country where the foreign company is located, resulting in the product being unable to pass the local inspection. For example, the export of some Chinese toys is blocked because they do not understand EU standards.
Solution:
Conduct qualification audits and on-site inspections of suppliers before procurement, and refer to past cooperation cases and customer evaluations.
The contract clarifies the quality standards, inspection methods and acceptance process, and introduces a third-party quality inspection agency to conduct the whole inspection.
Fourth, supply chain and logistics issues
Problem: China has a wide area, unbalanced logistics infrastructure, delayed logistics distribution, loss and damage of goods, and insufficient logistics network in remote areas; In supply chain management, the supply of raw materials and the production cycle of suppliers are uncontrollable, which affects the delivery of orders.
Solution:
Choose enterprises with rich experience in international logistics and a wide service network to cooperate, and use the logistics tracking system to monitor the status of goods.
Establish close communication with suppliers, regularly understand the supply and production progress, formulate emergency plans, and reasonably arrange procurement and inventory.
5. Payment and Settlement Risk
Problem: International payment is affected by exchange rate fluctuations, foreign exchange controls and differences in payment methods, and the operation of letter of credit and telegraphic transfer is complex and error-prone, resulting in increased costs or delays in fund settlement; China’s domestic payment system is not well connected with the rest of the world, and it is inconvenient for foreign companies to use mobile payment.
Solution:
Choose the appropriate payment method according to the transaction situation, and use financial derivatives to manage exchange rate risk.
Learn to use domestic mobile payment platforms such as Alipay and WeChat Pay, and maintain communication with financial institutions to solve settlement problems.