21 December, 2018
A Glimpse of the past – Chen’s stories on foreign trade (Rong Lee, after Salon by ZHSCI)
Stories bring people together.
This afternoon, we have learned from Mr. Chen 4 stories associated with his experiences as a one of the forerunners in foreign trade, doing business with African French-speaking countries in the 1980s and 1990s, and as we know, he spent his early years learning French in Nanjing University.
The first story took place in Cameroon in the 1980s, when it was a time Chinese people were desperately eager to sell products abroad, especially when they had large stock of goods, tea. They learned that Cameroon may have a market for this particular kind of tea. When they arrived in the capital, Yaoundé, in an absolute foreign country, they had to be careful and make prudent choices on which taxi to take and which hotel to stay at, anything that could be encountered in a foreign land. From business directory in the hotel room, Mr. Chen managed to find some useful information and made a smart decision to contact the Chamber of Commerce for help, and through them, they had located their customer. Nevertheless, the transaction still remained a tough issue.
Actually, Mr. Chen has focused a great amount of time on transaction techniques in the afternoon, and Letter of Credit (L/C) was considered the most reliable method. Though I have made a living in a foreign trade for more than a decade, I have not personally dealt with L/C, as my logistics colleagues take care of that. So his insights are still useful to me. When the information was not easily available about a new business partner, L/C definitely brings great confidence to the transaction, as the bank is held liable for the payment when the shipping documents are accurately and completely submitted to the bank.
The second story is about a fraud, and it was a well-plotted trick with a 9.6 million USD bid of container bags, amid the background that many factories and people were eager to win the business. When this opportunity approached Mr. Chen, he felt he could not get rid of the lingering doubts in his mind. Why did the people bring his company such a huge opportunity out of nowhere? Why was the offered price about 20~30% higher than the average market price? How come was the dealer’s name not matching the name on the certificate of this company, who claimed it was his pen name on the certificate? This guy and his another partner were asking for an commission of 5 million RMB. As a prudent man, Mr. Chen was very careful in designing the transactions which also involves a law firm to oversee the contracts & documents and bank draft. In the end, as the L/C did not show up in the back-and-forth socializing, Mr. Chen decided to stop playing this game with these two. But he shared with us that this guy had finally got what he wanted from another victim who was an Inner Mongolian trading company, and get a share of 2,50 million RMB. It makes us thinking what kind of life is this guy leading now in his elderly life, as he is supposed be in his 70’s. Because the fraud was so well designed and everything falls within the boundary of the rules and laws, it was made not feasible and practical to suit him for his wrongdoings.
Chen went further on 2 more stories, as these were more complex, involving real L/C, several countries, and lots of people, which made my attention drift away, for I could hardly apprehend and absorb such complicated dealings and transactions at the moment.
In the afternoon, he has shared with us some of his insights and I was touched.
“In the international trade, not all frauds we are talking about are real frauds, it could be one out of ten cases is genuine fraud. The rest that did not result in the satisfactory outcomes usually have all sorts of different reasons in the development course of dealings.”
“In those days, when our country is in a desperate need of foreign currency, the primary purpose of international trade is more about bringing in USD for our economical construction, than making money. Quite some people in this field work so wholeheartedly to achieve such goals, even playing unlawfully.”
“In those days, when we were doing business with the foreign countries, we were much respected and treated with great courtesy. Nowadays, though we are much richer and better dressed, our foreign counterparts do not necessarily respect us as much as before.”
These years, alongside the opening-up of China, the international trade has surged for decades, with the trading infrastructure and platforms continuously developed, more importantly, the communication technology development has made international trading much easier and reliable, to name a few, internet, email, smart phone, etc. As a result, apart from good marketing and good amount of risk control, we are able to focus more on our products which may better serve our customers’ growing needs.