Selling software/hardware to China - any experience?
Discussion
Hi guys,
Trying to close a deal in China at the moment, I have dealt with the customer in several other countries without issue but here I am being told that it is not possible for a Chinese company to pay any company outside China - is this correct? Does anyone have any knowledge/experience of this?
I don't have any local partners that I can go through at the moment, but even if I did I would think that if the above statement is correct, then I would still end up not being paid as of course the partner would have the same problems in paying a foreign company.
Client is a global company so trying to get them to pay through internal channels and route the invoice through UK but this also seems impossible.
Any ideas please guys n gals?
Trying to close a deal in China at the moment, I have dealt with the customer in several other countries without issue but here I am being told that it is not possible for a Chinese company to pay any company outside China - is this correct? Does anyone have any knowledge/experience of this?
I don't have any local partners that I can go through at the moment, but even if I did I would think that if the above statement is correct, then I would still end up not being paid as of course the partner would have the same problems in paying a foreign company.
Client is a global company so trying to get them to pay through internal channels and route the invoice through UK but this also seems impossible.
Any ideas please guys n gals?
B3Svert said:
I am being told that it is not possible for a Chinese company to pay any company outside China - is this correct? Does anyone have any knowledge/experience of this?
It is cobblers, I know loads of people here who do business in China and never have problems getting paid ... well at least not due to them not having a China registered entity at least.Especially if the compapny is an MNC with business entities outside China, how do they operate between each other then??
ETA - or if there is such a regulation, there must be a simple work around as i know of individual traders working there in such a way. Will ask tomorrow if you want.
RE the reverse engineering - they will, but they will make a pigs ear of it!
Edited by XJSJohn on Wednesday 7th January 10:26
Hello,B3Svert,
Transactions with payments made by foreign currency are still regulated in China majorly because the Chinese curreny is not a free exchanged currency. As a result, a chinese identity who wants to do international business cannot use a foreign currency freely unless it has obtained approval from the goverment. Your customer may tell you the turth if it does not have an approval. It used to be very difficult to get such an approval two decades ago. But it is relatively easy now. The thing is many Chinese companies just cannot be bothered to get one.
I suggest you could ask your customer to find an agent company (there are trade companies specialized in doing international business here and have the approval)through which the payment can be made. But be advised GBP is not a common currency in China's import&export sector. You may have to take Euro or USD in stead. It would be better to ask this agent company if it has a GBP account in the bank.
Or if the amount of the money of this transaction is quite small, like under five thousand US dollars(not sure the exact figure regulated by the government), it is possible for the customer to pay you through a personal account.
Transactions with payments made by foreign currency are still regulated in China majorly because the Chinese curreny is not a free exchanged currency. As a result, a chinese identity who wants to do international business cannot use a foreign currency freely unless it has obtained approval from the goverment. Your customer may tell you the turth if it does not have an approval. It used to be very difficult to get such an approval two decades ago. But it is relatively easy now. The thing is many Chinese companies just cannot be bothered to get one.
I suggest you could ask your customer to find an agent company (there are trade companies specialized in doing international business here and have the approval)through which the payment can be made. But be advised GBP is not a common currency in China's import&export sector. You may have to take Euro or USD in stead. It would be better to ask this agent company if it has a GBP account in the bank.
Or if the amount of the money of this transaction is quite small, like under five thousand US dollars(not sure the exact figure regulated by the government), it is possible for the customer to pay you through a personal account.
Hi Yli,
Thanks for the good info, actually I am happy to be paid in Yen and can arrange a fixed rate with the bank for a few months so I know how much to requote and to expect in payment.
I'll get them to speak to a trade agency as you suggested, had a feeling they were just being lazy!
Cheers.
Thanks for the good info, actually I am happy to be paid in Yen and can arrange a fixed rate with the bank for a few months so I know how much to requote and to expect in payment.
I'll get them to speak to a trade agency as you suggested, had a feeling they were just being lazy!
Cheers.
Hi,B3Svert,
I presume you might confuse Chinese RMB, or Yuan as someone pointed out, with Yen which I think is the Japanese currency. I saw people use the same word for both. But strictly speaking they are different.
If what you really meant was Chinese RMB then I doubt your customer can pay it. As I said RMB is not a free exchanged currency at the moment. THe outflow of RMB to countries outside China is controlled, just like the inflow and outflow of any foreign currency. I heard people mentioning that it is now possible for chinese companies to pay RMB to their foreign partners. But I never really saw such things, nor did I find any government regulations allowing such deals.
I presume you might confuse Chinese RMB, or Yuan as someone pointed out, with Yen which I think is the Japanese currency. I saw people use the same word for both. But strictly speaking they are different.
If what you really meant was Chinese RMB then I doubt your customer can pay it. As I said RMB is not a free exchanged currency at the moment. THe outflow of RMB to countries outside China is controlled, just like the inflow and outflow of any foreign currency. I heard people mentioning that it is now possible for chinese companies to pay RMB to their foreign partners. But I never really saw such things, nor did I find any government regulations allowing such deals.
OK yes I'll get my coat....
RMB is what I'm talking about, just spoken to China-Britain Trade Council who are being very helpful in sorting this out, looks like all they need to do is register with their bank to open a foreign currency account or go with a trade agency partner as Yli suggested.
Thanks again PH for the info
RMB is what I'm talking about, just spoken to China-Britain Trade Council who are being very helpful in sorting this out, looks like all they need to do is register with their bank to open a foreign currency account or go with a trade agency partner as Yli suggested.
Thanks again PH for the info
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