Having trouble paying a Chinese supplier? Did things start off ok for small orders, but you're facing dodgy payment options when you scale to volume? Let's take a look at why this happens, and how we can help ease your China payment and export problems!
CNY is a controlled currency
Chinese Yuan (CNY, RMB, kuai) is a controlled currency: the government has strict rules for how and why it can be exchanged for other currencies. This gives China more control over foreign investment and domestic capital in the national economy.
You can't send a wire to China in local CNY currency** because there's simply no way for your bank to exchange the money for you. The Chinese government doesn't sell CNY on an open market like US dollars or Euros.
Your Chinese supplier can't just convert foreign currency to CNY either. The bank will call to notify them of the wire, then they go to the bank in person to show their export license, a goods invoice, proof of tax payment, and proof of export declaration. If this verification isn't completed in a few days the wire is returned to you less fees (~$50).
Mom and pop shops that give amazing China prices rarely have an export license, and often have no idea how to receive foreign currency legally. Foreign "China Guys" who spend some time in Shenzhen and now peddle services to hacker/Makers have even less of a clue!
Who needs export brokerage
Does this describe you?
Don't mess around; we'll use our Chinese company and licenses to handle the export on behalf of your supplier.
A better way: Big Company export brokerage for dirty prices!
That's it! We have all the permits and experience necessary to handle currency exchange and proper export procedures. Sit back and wait for your stuffs to arrive without anything dodgy messing up your supply chain! Your backers applaud you for a project delivered on time and without drama!
Here's the fine print. Stuff you should know, stuff that goes wrong:
Check us out
Freight cost and testing notes!
We're super eager to try this service and automate it further, but we're just starting and we need your help! If this service might be useful please place an order and we'll contact you for further info. You can request a full refund up to the moment we sign the final brokerage contracts!
Unfortunately we can't provide you with the best freight costs automatically. We need to know a bit about the stuff and make some calls to get the best quotes. Freight is sold at 3% markup to account for payment processing and currency exchange fees, we can provide you a copy of the official government tax receipt for freight.
What we can't do
We want to help make trading with your established suppliers faster, simpler, safer, and maybe even cheaper. We're not qualified to verify the quality or fitness of goods, nor can we assist with disputes or problems.
China vs Hong Kong
Our Chinese company is owned by a Hong Kong company. This is how all the kids do it these days. Depending on the nature and size of the transaction we use our Hong Kong company as an intermediary between you and our Chinese company. This is handy if we need to make multiple attempts to get the transaction to go through, and a lot cheaper using the handy "Cross-border remittance" tools available from our Hong Kong bank.
How to pay a supplier in China
There are three legal routes to get money into China for CNY transactions:
While the process itself isn't too difficult, most of the permits require months long applications and deposits of serious amounts of capital. It just isn't worth it for a lot of small/medium Chinese manufacturers and suppliers to deal with foreign customers directly (which is why there's so many agents on Alibaba!)
Things people (who should know better) do:
Even people with a decade of experience working with China still do some of these really stupid things to avoid using an export broker. China has come a long way in the last decade: don't believe that famous hacker with pants full of chips, these things are not tolerated as they were in the past. However, there really hasn't been an alternative for open hardware hackers: brokerage firms want a high percent fee and pricing is rarely transparent. Often a brokerage isn't even willing to handle less than a shipping container in size. We're trying to change that!
What can go wrong?
If smuggling is part of your supply chain you'll face the same disruptions as any illicit operation:
Would you risk it in your country? Then please, for the love of the year of Linux on the desktop, don't do it! To paraphrase Eric Pan of Seeed Studio: When China builds a wall, China also builds a door. This isn't the 1970s. Word.