Increasing Frauds - SMEs Wary of Doing Business With China, Indian SMEs Should Wary in Business With China, Indian SMEs to Attention of Doing Business With China

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Saurabh Gupta | 01 Jun, 2010
The business of export-import can be risky and for a small and medium enterprise (SME) it can be a calamity, when one didnât know much about their far poising new partner sitting in another corner of the globe. Companies whether big or small often face critical business risks including the danger of corruption and fraud.

Recently an exporter based in the capital reported SME Times that he had received order from a Chinese company. After further negotiation and finalizing the deal when he went to China they (the Chinese firm) demanded that first he should buy gifts for its staff. He consulted few people and found that it was fraud company and had earlier also duped several businesses from India and elsewhere.

This is not a single case of fraud; there is fair good list of fraud companies across the globe. When SME Times talked to a couple of firms, who received mails from such fraud companies from China, they alleged that they had received many unasked emails from such companies looking for representatives to establish a business presence in other countries and for transferring payments. These kinds of mails were coming to them from various sources of B2B tools very frequently and mostly from China, they added. Most of these companies who are SMEs told SME Times that due to lack of technical expertise, sometimes it becomes very difficult to differentiate between a genuine and fake inquiry coming to them via emails and urged the government to take steps to minimise and filter such frauds.

Today SMEs contribute about 40 percent of India's exports, about USD 70-75 billion a year. While, both the governments of India and China were committed to cross the bilateral trade of USD 60 billion in 2010 , these kinds of activates are hurting the economic relations between the two nations, SMEs added.

Another exporter who didn't want to disclose his name, said that he has received an order from a Chinese company. They have sent him an invitation letter for to get the China visa. They have also sent him a contract draft, which he is to sign in China, and then after they will give him the 40 percent advances of the deal to start the work. "But I am very confused. After hearing how companies have been duped, I'm not sure whether this is a fair company or just a fraud," he said.

I really want business but I don't want to get into unnecessary complications, which can incur loss. I wish there were some ways or means to know more about this company," he added.

Menawhile, Chinese Premier Wen Jiabao at a meeting with Indian Commerce and Industry Minister Anand Sharma recently said, "the governments of both the sides want a healthy relation between India and China. China and India were not opponents but partners."

"Only if China and India achieve common development and prosperity could we have a real Asia century," Wen added.

But there are several areas where the governments have to work upon to insulate small exporters from frauds that usually crop up. Unless the governments come to some understanding to make things transparent, achieving the trade target will be a far cry, exporters added.