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  • I began doing business in Asia about 10 years ago. From the outset, this has been fascinating, exciting and complex. I started this blog as a way to respond to practical questions and to separate fact from fiction when viewing Asia from the West. S.Breteau, CEO of Asia Inspection.


  • Contact: chiefasiainspector@gmail.com

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Attention all buyers !

Factory_100 I heard rumors these last days saying China was going to cut tax rebates granted to local exporters on a wide range of goods... Today for the first time I read something official here on the matter.

This is big (bad?) news !

From 1st of July (that is, in about 10 days), we are very likely to see Chinese suppliers react drastically and raise their selling prices to maintain profits - apparently we are talking about 5 to 10% increases on some products (clothes, shoes...), which will have a clear impact for AsiaInspection's clients !

So the Chief's tip of the day to all importers would be to hurry and push for shipments before the end of June !

La zone d’ombre de la corruption

L’article suivant sur la corruption en Chine n’est pas dénué d’intérêt. Notez que selon ce qui y est dit, le phénomène serait plus courant lorsque des fonctionnaires de l’administration sont impliqués (pour une surprise, ça c’est une surprise !). Certains actes relèvent évidemment de malversations. Mais à quel moment pouvons-nous dire que la simple politesse ou l’hospitalité deviennent inconfortables ?

Les entreprises de contrôle qualité sont parfois confrontées à des situations de corruption. Lorsque les fournisseurs demandent aux inspecteurs de fermer les yeux en échange d’argent ou de cadeaux, par exemple. Bien évidemment, il existe toujours une zone d’ombre. Y a-t-il corruption lorsqu’une usine envoie un véhicule pour passer prendre l’inspecteur ? Ma société répond par l’affirmative.

Nous demandons à nos inspecteurs de ne jamais rien accepter de l’usine qu’ils auditent, qu’il s’agisse d’un repas, d’une course en taxi ou d’un trajet en voiture. Nous leur allouons bien sûr le budget nécessaire pour couvrir leurs dépenses. Nous signifions également très clairement aux usines que nous n’avons aucun pouvoir de décision, la décision finale étant toujours prise par le client, et non par nous. Nous sommes leurs yeux dans l’usine. Nous avons par ailleurs d’autres secrets en interne qui permettent de protéger nos inspecteurs de divers types de pressions malhonnêtes – ces procédés pèsent peut-être sur le portefeuille mais ils ont le mérite d’être efficaces.

Ce n’est pas en offrant des pots-de-vin à nos inspecteurs que les fournisseurs audités auront l’assurance d’obtenir l’aval des clients. En outre, nous gardons un œil sur nos inspecteurs en organisant des audits internes impromptus au cours de missions d’inspection. Nous disposons également d’une base de données qui nous permet d’avoir accès aux résultats établis par les inspecteurs à la suite d’un audit et d’identifier les bons, et les mauvais, inspecteurs. Leur travail est évalué par des superviseurs chargés de noter les éventuelles bizarreries constatées ou de rechercher les informations qui n’apparaissent pas comme elles le devraient dans les rapports des inspecteurs. Enfin, c’est évident, nous payons bien nos inspecteurs, nous les traitons bien et nous faisons en sorte qu’ils soient fiers du travail qu’ils accomplissent.

Sébastien Breteau

Inside the factory

  • Worker2_v2_230806A major multinational company recently asked us to audit one of their supplier’s China factories, and our Auditor found two workers just shy of their 16th birthdays on the factory floor. The legal working age in China is 16. The client’s immediate response:

• Business with this particular factory has been suspended.
• Both supplier and factory have been asked to correct the problem and to put measures in place to ensure it doesn’t happen again.
• A second follow-up audit is to be carried out, at the supplier’s expense.
• The factory must offer a job to the kids' family members to ensure no loss of revenue for the household.

These issues -especially now when any whiff of social irresponsibility, negligence or exploitation can be devastating for their image. Although child labor is much more common in countries like India and Bangladesh than in China, it should be noted that the legal working age in some countries is 15 rather than 16 and that the notion of apprenticeship muddies the waters. Even in France, the legal working age was 14 until well into the 1960’s.   

Small tip for quick action (but not a replacement for a solid policy): ask the factory to create an HR file which contains a copy of an id for each employee with a record of starting and leaving date. In the long run, multinational companies will be judged by their ability to put social auditing processes in place and by how swiftly the respond to nasty surprises.   

Taking the good with the bad

China Law Blog contrasts my China-championing “Tale of Two Offices” post below with another, more China-critical post, Going Global, which talks about business traps for the unwary in China and recommends contingency planning. (Startlingly, given China 's environmental and urban/rural divide problems, Going Global also makes the claim that: "One of the greatest miracles of China's growth story has been the government's ability thus far to maintain the delicate balance between rapid growth and its negative impacts.")

I agree contingency planning and thorough detailing is vital. My point that China is (in most aspects) a relatively liberal regulatory environment is compatible with the idea that it's still an unfamiliar environment for someone coming from the West for the first time and that it pays to step carefully. Knowing (and possibly approving of) the way the business rules work is one thing; you also need to know how the people work, and how to work with them. If you're planting a seed on fertile ground, you still have to water it.

As China Law Blog says: "The company that thinks it can send someone to China for a month or so, hire a great local manager for $300 a month and then leave will virtually never succeed."  On the bright side, it also mentions most companies do make money - "despite frequent quality control problems". And I know a fine company who could help you with that!

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