This story was published almost two years ago on my other blog as ‘Chinese Business Scam’. Expat Chronicles is my only blog now, and I thought it’d be a nice primer for the next few posts on China.
I listed a Peruvian company’s products on Alibaba – a B2B website meant to match suppliers with buyers. I received an email one day from a distributor in Guilin, China. As always, I replied to “Kylie” with product info and pricing. She requested samples a few days later. I Googled the company. No website but a dozen or so hits on market-research sites, so I sent the samples. Weeks went by. I sent an email to confirm they received them. Kylie replied saying she did and that they needed to administer a “product test”, which can take up to a month.
More than a month went by and I asked her if everything was OK. She said they were still waiting on the test results. She told me she would have more information in 2 – 4 days. Some two weeks went by and I forgot about her. One day, out of the blue, she emailed me a purchase contract with an order for $250K. In the email, she asked for somebody from the company to come to Guilin, China to meet face-to-face and sign the contract.
The company GM looked over the contract and said everything seemed OK. I started looking into Chinese visas while emailing Kylie about certain issues – primarily Mandarin translations for the packaging. We didn’t want to discuss or change packaging after the contract was signed because it would be hard enough to fill the large order in the stated lead time. We wanted to know exactly what languages would be on the packages before we went to China. Kylie danced around the issue and said we can discuss it face-to-face.
Somewhere in all this mess, I decided to Google-search the company again. Same results (not much). I don’t know why I did what I did next but I thank God I did. I Google-searched “Guilin China scam.” Dozens of results came up with titles like “Chinese Internet Scam – Buying Center & Trip to China” and “Guilin China Fraud.”
I clicked and read. The links were forums (many on alibaba) describing the following scenario. The scam is to lure small and medium-sized businesses to China under false pretenses of signing a purchase contract for a large order.
They pick up the victim at the airport and take him to the 4 – 5 star hotel they had reserved for him. They take him around town to breakfasts, lunches, and dinners while talking business. The decision-making manager has a young female to translate for him the whole time. He negotiates hard and the deal slowly develops. Meanwhile, the Chinese are earning percentages from the hotel and all the high-end restaurants they take the victim to. (I assume the victim pays the bills because he is trying to win the customer’s business. Maybe the restaurants give them different menus with higher pricing because they know in advance who is coming).
At the end of the victim’s trip, the decision-maker signs the worthless contract. The victim is happy. The decision-maker says it still needs approval from the finance manager. Would the victim like to buy the finance manager a gift to win his approval? Sometimes the victim refuses. Sometimes the victim is thrilled about the deal and agrees. The victim is taken to an art gallery full of pieces that cost $10K – $30K. After buying one, he is told he can give it to the finance manager the next morning (the victim’s last day). The next morning, he is told that an emergency came up and the finance manager had to fly to Beijing. But the victim can give it to him when the finance manager visits the victim’s factory next month. The victim never hears from anybody again. The art is worth a couple hundred dollars.
As with anything, there is fraud on alibaba. If I see a message from Nigeria or Togo, I don’t even read it. I’m accustomed to what the scams look and read like. But this didn’t feel like one. I dealt with this woman for almost three months before she placed an order. She asked skeptical questions and made me work for the deal. They wait so patiently, and at all the right times. There were no red-flag concessions like paying for a distribution license or granting credit for the first order.
There are a lot of people who made the trip and described the scam in the forums. One particularly angry victim is gathering evidence in an attempt to bring them to justice.
I didn’t immediately halt communication with the Chinese. I thought of ways to get something out of them – revenge, if you will, for trying to take advantage of me. I knew they wouldn’t ever pay any money for anything. I pressed harder for Mandarin translations. I told them we applied for our visas but the GM decided he absolutely will NOT get on a plane until we have Mandarin text for the packages. They finally sent translations to me this week. I had a Mandarin-reading friend look them over and they are accurate! At least I wasted some of their time and got their hopes up.
I wasn’t done yet. I decided to take it a little further. I picked a flight from LAX into Guilin and told Kylie that we’d be on it. I finished the email with something like, “Look forward to meeting you and starting a successful business relationship!”
Kylie emailed me after we didn’t show. I replied with only the link to my new blog post. Her reply to me:
I do not know your meaning. why do not you come here ?
Last night we wait for you at the airport for a long time, but do not saw you. Anything is ready,would you tell the reasons, is ok?
You know we book the rooms for you and prepared the gifts.
My boss have reproach me, I hope you will give me a reasonable explanation.
Thanks and best regards,kylie
Images of Guilin, China:
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