China Expert

By Wang Jun and Stephen Lou

In light of the financial downturn, many foreign invested and domestic companies in China have been laying off their employees in masses. Though much of the focus has been in the manufacturing sector with stories of massive lay-offs and factory shutdown, very few industries will be completely immune to the downturn – forcing many employers to consider downsizing as an option to weather the storm. This, coupled with the new Labor Disputes Mediation and Arbitration Law (effective May 1, 2008), allowing employees to file labor arbitration cases free of charge, China has since reported a significant increase in applications for labor dispute arbitration filed. Consequently, employers should be especially aware of proper procedures when considering the termination of employees during these times.

Under current Chinese law, there are two options available for the employer to reduce its financial obligations to employees based on financial difficulties. With respect to the first option, in lieu of dismissing the employee, the employer may negotiate with the employees to adjust the current employment agreement by significantly decreasing the employee’s work assignment and salary; in effect placing the employee on “holiday status”. The second option would be to simply terminate the current employment contract with the employee. Read the rest of “Practice and Procedures for Termination of Employees Due to Financial Difficulties in China – Part 1″ or post a comment

By Diana Wang

Follow up well afterwards

According to our experience, most of the exhibitors and visitors will not actively follow up after the exhibition, maybe because they are busy with catching up with other work postponed due to the trip. Even though you prepare very well before the exhibition and have a wonderful discussion with the right suppliers, the trip will be wasted if you do not follow up adequately. Although the Chinese are learning to be more professional and international in their approach, you can expect to receive 2-3 follow-up letters from the 10 companies you have spoken to. (Perhaps 10 years ago you could have expected all 10 companies to be waiting for you to call them first). In order to establish a healthy relationship with a promising Chinese supplier, you must be prepared to become the side who will take the first step and who can educate them and push them to be more professional.

Here we will talk about some details to pay attention to when you follow up with the Chinese exhibitors: Read the rest of “Achieve Good Results From Sourcing Exhibitions in China – Part 5″ or post a comment

By Andrew Reich

Poor quality product from China continues to be a major issue for both importers and factories. As a buyer, you can protect yourself and also educate your clients with some simple on-line research on product safety and performance standards. With the right documentation you can then clearly communicate these standards to your Chinese factory, and this way often prevent a major QC lapse.

The first step in this process is identifying standards for your product. Below are 5 strategies to achieve this:

1. Consumer Products Safety Commission Website (CPSC) – This site is the main source for USA product standards. Visit them and use the search feature to search your product type and related terms.
2. Consult with a 3rd party quality company/consultant – For a relatively low fee you can request that such a company provide you a full product testing and requirement standard page which will provide a lot of clarity. Read the rest of “How to Find Product Safety Standards and Communicate them to your Chinese Factory?” or post a comment

By David Dayton

This is the body of a presentation that I give for Global Sources at the China Sourcing fairs. Global Sources asked for a presentation that was aimed at helping new buyers to China understand what some of their options for financing are now that the world economy is so bad. There are, to be honest, no new options (TT’s and LC’s are still the standard), but there are some unique situations that may offer some new opportunities for buyers coming to China.

Know your market

Just because we keep seeing bad news in China and the all the other world markets, for example, exports form China have dropped up to 60% in many industries, that doesn’t mean that we have the whole picture. There are pieces missing, both good and bad, from a broader view that are important to understanding the economic situation in China today. Read the rest of “China: Sourcing in Bad Economic Times – Part 1″ or post a comment

By Steven Dickinson

Many small and medium sized companies that engage in OEM manufacturing/ outsourcing in China fail to take the steps necessary to protect themselves. When problems arise, they can do little or nothing to protect themselves because they have no legal basis for protection. The fact is that outsourcing disputes must be resolved in China, under the Chinese legal system. The Chinese legal system has improved greatly over the past ten years and taking a few basic legal steps can greatly reduce your risk. The cost of such protection is modest compared to the protection it will provide.

The following five basic steps will greatly reduce your problems with Chinese manufacturers, while improving your chances of recovering should any problems arise. Read the rest of “Outsourcing in China: Five Basics for Reducing Risk” or post a comment