Angst and Myth in China

I've been extremely busy these past few weeks.  Why have I not been writing a post?  Because I'm at home on my desktop, in my basement, communicating with potential Chinese suppliers all night, every night.

In my mind, the myth of the Great Chinese Businessman is just that, a damn myth.

I find myself dealing with fresh college graduates that don't have a clue, middle aged salesmen that just don't give a fuck anymore, and the forever "if you are American", the price just went up syndrome.

I could write a very, very long article on linkedin, but I would just be called "Anti-China", or some other dumb shit. 

Let me slow down a bit though, and take a deep breath.  If I only wasn't lazy I'd go back up and grab a glass and pour a sip of MacAllan's Scotch Whisky.

Alas, I'd rather write this to calm me down.

I'm preparing a trip for China sometime in March.   And trying to source a product of ours that we currently build in the States'.  It is built by a coterie of self entitled factories, all located in the Poor Deep American South. 

Their leadtimes are quite long, and while the quality is good, its quite frankly time for a price check.  We simply need to keep our suppliers honest, and have done a poor job of it.

This is where I come in.  The first problem I have when speaking with potential Chinese suppliers is the tariff.  Now without question, regardless what you think of him, Trump's attack on Chinese trade has support across the entire spectrum of American society.  If anything, he should have gotten European support as well.  The problem with Trump is he is too much John Wayne.  He is too little "Philosopher" and too much "King".

So now I have this 25% tariff to deal with.   We all remember how the Chinese want to "be your friend", and "have a long relationship", right? 

So obviously the Chinese adjusted their pricing to help us adapt to this tariff, correct?

Not at all.  I don't know about you, but the Chinese supply base I deal with hasn't cut their price one penny. Zero.  They just don't care.  They call it problems between two governments.  In the interim, they dare me to go to Vietnam(I did!).

I must admit to being taken aback by the lack of flexibility on China's part.  I thought surely they would have helped out just a bit with pricing.  The answer is not at all.  Phooey!

Still, perhaps an even bigger problem I have is this very bad habit all too many of these sites have to post pictures of our products(we have many variations) on their website.  The gall!  One would think they actually make these parts!

Are you surprised they don't?  Just tonight I had a supplier with my product on her website ask me for specs!   She asked me for specs after I asked her to quote the picture proudly displayed on their site.  Another supplier when confronted promised to simply remove the photo from their site.

China is still the Wild West folks.  Full of energetic, small, hustling companies with no sense of propriety.   Remember it ain't in the law but in the enforcement.  Simple as that.

Another problem I'm coming across is the incessant habit the Chinese are having of continuing to base a price off the nationality of the buyer.  Many of the factories I have spoken to have African customers for instance.  Now you will say "poor quality equals lower price", and I get that.  But the markups are huge. 

Chinese get the lowest price.
Africans the next lowest,
The rest of us pay triple.

I had a supplier sit down across from me once, a family firm.  The Sales Lady quoted me one price, and the son of the owner, after reminding her I'm a foreigner, simply doubled the price.  All of this took place over a 5 second span across a small table in a side conference room.  I was speechless.

Never mind the damn tariff. That will someday go away.  But this instilled "foreigners pay double"  negotiating tactic never will.  Or not until the dumbass laowai stop going to China and agreeing to such deals.

A story I once told on this blog goes like this:   I once was able to buy a certain product in the markets for $20.  Every time I visited the markets, I made my run.  Then suddenly one day the price jumped to $40.  I didn't budge.  Nor did they.  Finally I asked, "what gives?"

They pointed to another American across the room. 

"He just paid $40", she said.

He was my dumbass, ignorant boss.   The one that actually saw a huge billboard of Deng Xiaoping in Shenzhen and asked with a straight face, "Who's that?"

So no, I don't consider the Chinese good businessmen.  Not when they don't help out with a price cut when tariffs go into effect.  Not when they still try and rape us on pricing based on the color of our skin, and not when they think they can still false advertise without repercussion.

Yes, they simply lose out on orders.  But I must admit it they do not seem deterred. Because they really do believe they will sooner or later indeed get lucky.  Their concept is simple;  if I can't make big money, I won't sell.   But you know they will. Some dumbass American(or Aussie, or Brit, etc) will ruin it for everybody.


  1. Chinese do the same thing on the service side of things. They only want to offer you support services where they will make a certain profit. Of course, their quality is so bad that no one wants to use them for high-end service support; only the cheaper support services. All they care about is the profit margin so they simply ignore what you are requesting and keeping offering the higher-end services they can't deliver. Its like the famous scene from the Simpsons where Homer keeps burning his hand on the stove because he doesn't learn that it is hot. Same thing with Chinese suppliers.

  2. I find the key is just persistence. Of course I know I won't really get a good price until I've been working with them for awhile, just to show them I'm for real. Still many seem to forget that China is a big country, with lots of companies to choose from. This is not a country for the quick tempered.

  3. Sourcing Question: Are you seeing differences based on region? When I lived in China - i was in Taiyuan Shanxi; the factories there had almost no foreign buyers (note: this was early 00's) and would gladly give a small premium to China price in order to get business.

    I also did some business with Village owned cooperative factories that were desperate for work. Has this changed? Are you seeing premiums even when you go to the Hinterland?


  4. The problem Memnon is the small factories have no concept of Quality. They really don't. Unfortunately, they could never really pass a Social Responsibility Audit either. It is difficult to find a small factory with both good price AND good quality. We still get what we pay for.....


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