Chinese Negotiation: Do not interrupt me! And six reasons why you should not

Image via Wikimedia Commons

A lot of the tips that we share here on how to negotiate effectivelyin China are obviously not China-specific, but well-known negotiation tips or tactics. The reason why I choose to write about them for you is because, in some way, they are specially relevant to the China context.

Do not feel offended if it is not your case, but we have a distinct tendency to interrupt each other when we are negotiating or discussing. This is not only a big mistake but it is also culturally inaproppiate.

This is an anecdote shared by a Western businessman in China on this topic:

Once, while we were on the process of setting up our company, we were waiting at the notary´s office. There was a meeting going on inside and the discussion got quite heated. There was huge shouting coming from the office but there was also one detail that struck me. Not even at the peak of the argument did they interrupt each other. The dynamic was a heated argument in which each party would take turnsto shout and curse at the other, and then stopped and waited for the other part to react in a similar way. I had never witnessed something like that in my life”

So these are six reasons why you should not interrupt your business contact while negotiating:

In general:

1.If you are interrupting, you are not listening. And listening is thekey to effective negotiation.

2.You may prevent the other party from sharing information that may be helpful for you later on in the negotiation

3.It may be perceived as rudeto interrupt somebody who is talking to you

In China, particularly,

4.Chinese are good at listening and they do not interrupt the other negotiatorwhile talking.

5.It does not help you build the relationship, and relationship-building is vital to business success in China.

6.They just can´t understand why you asked a question if you are not going to let them answer.

What is your negotiation experience? Tell us your story!

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 If you are interested on this topic you may also like to read the following posts:

* 36 Tips on How to Deal or Negotiate with your Chinese Suppliers
* Sourcing from China: Who are the Happy Buyers?
* Quality Control. Can you Hear me Loud and Clear?
* 4 Tips to Succeed in Times of Silence

Going to War with your Chinese Supplier and 4 Ways to Prevent it

Todays post is an aggregation of two post I read last week that work well together:

1st Post
Last week I read an article on China Law Blog about a worrying trend that they are witnessing:
-In the past, when a Chinese factory provided bad product, they would usually admit it, and blame it on either a subcontractor or a supplier.
-Now they deny it and threaten to sue you if you do not pay whatever is still “owed”.

The explanation for current quality problems is the economic downturn and the fact that factories need to cut costs relying on lower quality components. But the key point in the article is the strategy shift on how to deal with serious quality problems with your Chinese supplier: (Read the full article here)

Today, the tactic is to threaten to prevent the American company from “ever doing business in China again” or, more specifically, to seize the American company’s product at the border. We take these threats very seriously and they have altered our approach to these sorts of cases.

In the past, if an American company was seeking $200,000 in damages from a Chinese company for bad product, we would most of the time seek to dissuade them from even bothering to pursue litigation. []

But the strategy changes if the Chinese company threatens to close you down. We have dealt with cases where US companies were unable to buy from any Chinese supplier without paying 100% upfront because their alleged failure to pay had caused China’s export insurance agency to refuse to insure payments from the US company. We have also dealt with way more than our share of cases where someone or something from our client was held hostage in China to secure payment.

If a US company is facing the situation above, our advise is that they sue the Chinese company somewhere, usually in the United States. Being able to show the Chinese insurance company, the Chinese police, or the Chinese border patrol agents, that you have sued can be invaluable. Your complaint against the Chinese company shows that the situation is not as simple as the Chinese company is making it out to be. Your complaint shows that the Chinese company is not necessarily owed anything at all and that you are not clearly someone who does not pay your debts.

Of course, if your company has no intention of continuing to do business with China and your personnel will not be going there again, then the best strategy probably would be to just walk away, just as in the old days.

2nd Post

When I read the article I left a comment with what I thought was the best (and obvious) advice you can give to anybody sourcing from China: “Quality Control ALWAYS, even with good suppliers”

And right afterwards, I read another article at the Quality Inspections Tips blog entitled “The 4 ways of checking product quality before shipment”. As preventing a problem is always better than having to fix it, I thought this post was a good extension to what we have previously read.

These are the 4 ways Renaud Anjouran describes in his blog (you can read his complete post here)

1.Inspections by external inspector(s) in the factory
Pros:
The final random inspection is the “standard” way of checking quality. Suppliers are used to it.
It is easy to set up and relatively inexpensive, even with many different suppliers in many different places.

Cons:
The supplier might interfere in several ways: only showing a part of production (usually because they are late), bribing the inspector, or shipping other products if the inspector does not stay until the container is sealed.
If the purchaser only sends an inspector after production is over, and if the inspection is failed, the supplier might refuse to rework the goods. He might wait until the purchaser is obliged to deliver his own customers’ orders.

2.Final inspections on a platform
This solution is popular with some large buyers.
Pros:
Inspectors are more productive (no need to travel), and the goods can be shipped immediately after acceptance.
No risk of supplier interference.

Cons:
Suppliers often resent this solution. If the inspection is failed, they have to pay for the transport back to the factory, sort & re-work the goods, and submit them again.
Not suitable for small and irregular volumes.

3.Piece-by-piece inspection in the factory -If you want to check 100% of production
Pros:
The defect rate in the shipment is very close to zero after this 100% check.
The manufacturer sees what is rejected and needs to re-work it.

Cons:
Suitable only for large and regular volumes in one geographical area.
Can be expensive, depending on the number of inspectors to station in the factory

4.Training & auditing internal inspector(s) in the factory
Pros:
Much lower cost than sending third-party inspectors
In addition to controlling the products’ quality, the inspector can report on production status

Cons:
You need a high level of cooperation from the manufacturer (no interference at all)
There might be many complications if you purchase through a trading company

What is your experience? Is it getting tougher to negotiate quality problems with your suppliers? Do you always check quality before shipment?

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Arbitrating your China Disputes

via Wikimedia Commons

China Law Blog published this month a series of three posts about “Arbitrating your China disputes”, by China arbitration expert Dr. Clarisse von Wunschheim. The posts discuss the current debate about where to arbitrate your China disputes, with two main schools of thought:
-Arbitration in China: in order to improve your chances of enforcement
-Arbitration outside China:in order to improve your chances of winning.

This is a summary of some key points in her posts: (but I recommend you read this very interesting series: post I, post II and post III)
-On the two schools of thought, Dr. Wunschheim believes that both of these approaches miss the point, and that the question of where to arbitrate is intimately linked to the parties’ expectations and needs and should therefore depend on a series of case-specific factors.

-Some legal context:
a) Under Chinese law only parties to a ‘foreign-related contract’ may choose a foreign dispute resolution forum.
b) For a case to be considered foreign-related, at least one of the parties involved must be of foreign nationality.
!! Foreign companies too often overlook the fact that their Chinese subsidiaries, including joint ventures or wholly owned entities, are considered to be Chinese entities established under Chinese law.
c) Under most modern arbitration laws, the law applicable to the arbitration clause is the law chosen by the parties (in the absence of an explicit choice, it is the law of the place of arbitration)
!! But, Dr Wunschheim states that enforcement of a foreign award rendered based on an arbitration agreement which disregards the forum selection restrictions runs a serious risk of being refused enforcement.

-So, what to do?
Dr Wunschheim does not believe this means you should refrain from entering into such arbitration agreements. She states that the key questions are: ‘What do the Parties want?’, and then ‘Which option is more likely to give them that?
She believes that lawyers focus too much on enforcement issues.
Studies show that in most cases, there is no need to resort to enforcement. The same seems to apply in China, where less than 10%of the total volume of arbitration cases are believed to result in enforcement proceedings.
There are a lot of other positive ‘endings’ to arbitration than enforcement, including amongst others:
-Amicable settlement before rendering of an award, (25% according to Queen Mary/PWC Survey 2008- and, with regard to China, 20-30% CIETACandBAC reports);
-Voluntary compliance with the award (50%, according toQueen Mary/PWCSurvey 2008 , and ‘high’ with regard to China according toCIETAC’s Secretary General);

Various studies conducted in recent years reveal that the parties firstly seek a fair and neutral process entitling them to resolve their dispute in a way that is acceptable to both of them. Sometimes, the parties just want a decision on a dispute:
-In order to move forward, and the expression of this dispute in monetary terms is more a ‘tool’ rather than an aim in itself
-A determination of the facts and liability for insurance or other similar purposes
-To create a basis for renegotiation of their business arrangements

So, it seems the expert feels there is no right or wrong.And I will finish with Dr. Wunschheim initial statement: the question of where to arbitrate is intimately linked to the parties’ expectations and needs and should therefore depend on a series of case-specific factors.

 What are your views?

 

 

Chinese Negotiation: 4 Tips to Succeed in “Times of Silence”

By Matthias M. via Wikimedia Commons

Have you ever been in a Chinese negotiation where suddenly everybody goes silent? It is not uncommon and it does not happen by chance.

One of my interviewees, an expat who had gone through a substantial amount of negotiation while setting up a manufacturing plant, observed on the topic of Chinese negotiations:

“Silence plays a very important role in negotiation. Our Chinese business contacts know we tend to feel very uncomfortable with silence. We become uneasy. Hence they use silence during negotiations to strengthen their position”

This conversation came back to my mind recently while I was reading a newspaper article about recruitment tips “Listening skills a winner for job hunters” (Waikato Times, Saturday January 14, 2012) based on insights by Jeffrey Kurdisch in the Washington Post.

One of the tips in the article reflects that very same comment. I reproduce it here because it is as valid for job hunting as it is for negotiation and life in general:

“Be comfortable with silence
Several recruiters have told me they use silence as a tactic to see how job-seekers respond. Negotiations research suggests that people who are uncomfortable with silence tend to share information that may put them at a competitive disadvantage. Savvy job seekers accept silence during a conversation and are careful not to talk about things that will reduce their employability. They also use silence moments as an opportunity to check on their own non-verbal communication (sit up straight, project self-confidence, no distracting mannerisms). If you feel the need to break the silence, try asking questions.”

Silence is also used in a range of situations in which you need the other part to open up and share information. One of my relatives, who was a marriage counsellor till retirement, says “we often used silence during a counselling session to allow people the time and the opportunity to share things that they needed to bring out”.

So, silence is widely used to bring information out. And, in a business negotiation, information is power. So be aware of your reactions to silence and follow in your own negotiations the advice Mr Kurdisch was giving to job hunters- that we could translate here into negotiation tips:

Tip#1. Be comfortable with silence

Tip#2. Do not feel pressured by silence into talking about things that will put you at a competitive disadvantage

Tip#3. Use silent time to review your negotiation strategy/tactics

-Tip#4. Break the silence with questions, if you feel the need to talk (this way you will not give away information)

By the way, my interviewee was very relaxed about silence. His tip was aligned with the ones specialists suggest: “Just take silence as a brief break in your negotiation. Take that time for reflection and thinking about how the negotiation is going and how to take it forward”

What do you think? Have you ever faced a silent room in your Chinese negotiations?

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Related Posts:
36 Tips on How to Deal or Negotiate with your Chinese Suppliers
Sourcing from China: Who are the Happy Buyers?

China Inspection Company: Has Yours Got a “Conflict of Interest”?

One of the tips you have often read in this blog is “you need to visit the factory and, if you can’t do it, you need an inspection company to visit it for you”.  I’ve repeated this one through different stages of the supply process (when you are selecting your supplier, through the product development process, during production, for quality control purposes…)

Today I was reading about this same topic at the Quality Inspection Tips blog. Renaud Anjoran  has written a post with tips on “How to Choose a Quality Inspection Firm”, based on an article at Pro QC International  Newsletter entitled Controlling Quality Worldwide- Without Leaving your office”.

I recommend reading both of them to get some insights on how to choose the right inspection company.

Michael L. Hetzel – Vice President / Americas, Pro QC International adds in the original article an interesting angle. Had you realized that your inspection company may have a conflict of interests?
These are the two “watch-out” remarks Mr Hetzel makes:

1. They may be the company that has qualified your supplier as ISO9000 or other quality standard
“A number of companies offering third party inspection services are also ISO9000 or other quality standard registrars. This can be a non-issue for the most part, or a liability if a vendor being qualified has been registered by that company, creating a conflict of the “of course they’re qualified, we registered them” type.”

2. They may not be a real 3rd party, but work also for the supplier.
“Another potential conflict of interest lies with companies that are not truly “third party,” who work for the supplier rather than the buyer. You’ll want a company who only works for you conducting these activities, or you may as well return to reliance on the seller’s assertions of quality and conformance and save the service costs“


Have you found yourself in this situation?
Do you agree with this view?

36 Tips on How to Deal or Negotiate with your Chinese Suppliers

During the last year, I have interviewed several entrepreneurs who source products from Chinese factories. Their tips and insights are scattered across a number of posts (and a few of them I’ve not even published). Today I am going to compile most of the tips I’ve heard so far on how to deal / negotiate with Chinese suppliers ( I say most because I am probably forgetting a few). Here is the check-list:

LOOKING FOR SUPPLIERS…
Tip #1. Initial Search for Suppliers: directories, trade-show directories and internet
Tip #2. Not all good suppliers have English websites, get on board somebody who can help you search in Chinese
Tip #3. Existing (good) suppliers may be able to help expand your supplier network in non-competing products
Tip #4. If there is any IP involved, register it in China before you approach anybody
Tip #5. Consider registering your IP for categories similar to the one you manufacture

SHORTLISTING SUPPLIERS
Tip #6. Approach them first with an introductory email presenting yourself, your company and detailing as much as possible the product you are after
Tip #7. If they do not answer fast (1-3 days) move on, they will give you trouble in the future
Tip #8. If you have a good number of suppliers to choose from, create a “pre-selection system” that helps you shortlist: level of response to your introductory e-mail response, telephone check (do they exist?), factory address provided, factory license, any certification your business requires, quality certifications…
Tip #9. Ensure you are not dealing with the middle man (I): Visit the factory… ALWAYS!
Tip #10. If you can’t visit the factory, get an Inspection Company to do it for you. It is not that expensive

NEGOTIATING WITH YOUR SELECTED SUPPLIERS
Tip #11. If you are not a fluent Chinese speaker, bring a native Chinese speaker to the negotiation- he/she will be a valuable support
Tip #12. Understand perfectly the production process
Tip #13. Be very clear on who is going to be making decisions
Tip #14. The best way to do business in China is face-to-face” Technology is great, but I do not think it is the way Chinese people are wired to work
Tip #15. “I can’t” is not in their vocabulary, so be wary if you get silence for an answer…
Tip #16. Make them recap the agreements, do not assume they understood just because you feel you were clear enough”
Tip #17. Give realistic purchase estimates. If you promise 10 more times than you are planning to buy, they will cut corners to meet their profit so it will hit you back with poor quality (they work on small margins)
Tip #18. Expect long negotiations: even points that have already been agreed will be raised again in the future
Tip #19. Pricing: Do not get obsessed with the cheapest deal. Quality has a price and you should also consider that.
Tip #20. Track commodity prices used in your products
Tip #21. Learn about your suppliers cost structure (how much goes into labor, materials cost…),
Tip #22 . If your IP is involved, make sure they agree to sign a good non disclosure agreement, with non use / non circumvention  provisions (I read this one at the China Law Blog- worth reading the whole post about it)
Tip #23. Make sure you have good contracts in place. It will be a good use of your money to get a China knowledgeable lawyer to draft them (so that the terms are enforceable and it covers all the points you need to cover- IP, stocks, product quality, product specifications, penalties, etc)
Tip #24. Ensure they have the machinery & capability to produce your product. Ask them to produce a few samples in front of you, even if they don’t match your exact specifications.

PRODUCTION & SHIPMENT
Tip #25. Make sure you visit the factory during product development. It will speed the process, as nobody will tell you on the phone when they’ve got stuck with something (especially if the product is technically sophisticated)
Tip #26. Visit the factory during production & for quality control
Tip #27. If you can’t visit factory send an inspection company or somebody you trust (and is qualified for the job)
Tip #28. Don’t pay till you are sure all the product is in good condition (make sure the contract is draft that way)
Tip # 29. Never relax! Even with good suppliers. “Quality Control: Always, even with good established suppliers”
Tip #30. Always be ready with back up options- you would be surprised about how many last minutes surprises happen
Tip #31. Expect Delays in your Supply Schedule (power shortages are common, national holidays…)
Tip #32. “Problems don’t finish after production. Supervise Logistic Paperwork! There are often mistakes that will get your shipment stuck

…ON-GOING RELATIONSHIP
Tip #33. Payment Terms… Some buyers feel that, once you build the business relationship,  things get easier (ex. Not requiring advanced payments)
Tip #34. Get rid of unreliable suppliers A.S.A.P. If they trick you once, it will happen again
Tip #35. Take care of good suppliers, they are not easy to find. Look for win-win when problems come up.
Tip #36. “Renegotiating conditions” is quite common. Your Chinese supplier sees the contract as the “beginning” of the relationship. If you follow tips 20 & 21 (track commodity prices & know suppliers cost structure) you will be able to assess if there is a fair reason to give in (hopefully in future productions)

Would you like to add your tips?

Sourcing from China: Who are the “Happy Buyers”?

After a couple of years in China, I have managed to meet a good number of entrepreneurs and business people sourcing goods from Chinese suppliers. I’ve also read plenty of posts from fellow bloggers providing negotiation tips and often narrating horror stories (and I’ve also shared tips and written horror stories myself!)

Last week I was chatting with somebody who is heading a representative office that helps source a number of goods to its headquarter. I soon realized this person was a satisfied buyer who surely had lots of horror stories to tell but was far from bitter about suppliers. That made me think about the people I’ve met that could be (quite simplistically) described as “happy buyers”. They all have some common characteristics.

What I’m about to write may not hold true for everybody, but I’ve come to realized that the “happy buyers” I’ve met share the following approach to business:

1. “Happy Buyers” are into building long term relationships
a) They happen to be genuinely looking for “win-win” situations because they want (and more importantly need) long term suppliers.
b) They focus on strengthening the relationship because they are aware that not having big purchase orders they need to leverage on the relationship- and with that objective in mind, they make sure that they visit their suppliers very often… because in China things don’t get done by fax.

2. “Happy Buyers” approach price negotiation very professionally
a) They understand their suppliers cost structure (how much goes into labor, materials cost…), and
b) They track commodity prices that are involved in their products
So, when a supplier comes back saying “I need to increase the price” they can:
a) Assess if there is a valid reason behind the request
b) Estimate what would be the fair cost impact
c) Objectively decide if they should give in (in future orders… not for this one!)
… All of which will positively help the long term relationship and both sides satisfaction.

And, of course, there are some other very basic things in common like having the right tools in places (contracts, good quality control…)… but for the purpose of this post I wanted to focus on the two I’ve mentioned above.

I know there will still be a lot of bad experiences out there (even when you have ticked all the above/ and even suffered by those same people I talk about)… but I am just describing what satisfied buyers that I’ve met have in common.

So, are you a “Happy Buyer”? What is your secret?

Tips for Negotiating and Dealing with your Suppliers in China (III): Original Equipment Manufacturing (OEM) Agreements

Are you sourcing your production from China? If you are, have you signed an OEM agreement with your suppliers? If so, is it good enough?

Today, I just want to recommend a few posts on this topic from the China Law Blog.  Last week they posted an article titled “Sourcing to China. A Tale of Two Companies” in which they give two real life examples on how good or bad your bargaining power can be depending on whether you signed a good OEM with your suppliers. I have heard a lot of business people talking about how often prices get a last minute hike or productions get delayed…and how little they can do about it…. Well, this post may show you that this should not necessarily be the case.

I also recommend you to go through the rest of the really good posts they have written on the topic (also mentioned in that same article), so that you can assess whether you have covered all the right points in your agreement:

http://www.chinalawblog.com/2010/04/china_oem_agreements_ten_thing.html

http://www.chinalawblog.com/2010/03/china_oem_agreements_you_are_n.html

And can read their advice on what language contracts should be signed in, or how to resolve disputes:

http://www.chinalawblog.com/2009/07/china_oem_agreements_we_like_o.html

12 Tips for Negotiating and Dealing with your Suppliers in China (II)

This is a second post in the series “Tips for Negotiating and Dealing with your Suppliers in China”. You can read the first one here.

Today, I will capture 12 tips shared by businessman “Mike Smith”. This is not his real name… but his company would rather keep a low profile when it comes to their sourcing business in China.

Tip #1 . “Visit the factories”
You must visit the factories yourself. What you see on internet has nothing to do with what you find here. This may sound like a very obvious tip to a lot of people, but I was new to China sourcing when I landed here… and for me it was a big surprise to find out how far from reality what I read on the net was and how many middle men you could end up contacting.

Tip #2. “Be very clear on who is going to be making decisions”
Another beginners tip…Make sure you are talking directly to the decision maker. It will save you a lot of time.

Tip #3. “Good suppliers may be able to help expand your supplier network in non-competing products”
I have managed to develop a good network of suppliers (through trial and error!), and I’m currently finding them a great source of good referral information. My business has a technical side, products need to meet certain standards, and they know who works well in their industry.

Tip #4. “Effective Communication (I): The best way to do business in China is face-to-face”
Technology is great, but I do not think it is the way Chinese people are wired to work. When we are working on projects, I send my regular suppliers technical information, blueprints… I discuss specifications, I explain standards….and I try to assess by fax and phone whether all the information I am sending to them is clear. But it is only when I follow up on the projects with a factory visit that I realize how many questions and issues they may have! And I’m talking here about regular suppliers, so they know me and, supposedly, we have already created good communication channels!
This is why I always ensure regular visits to my suppliers. What really works here is doing business face to face.

Tip #5. “Effective Communication (II): “I can’t” is not in their vocabulary, so be wary if you get silence for an answer…”
They find it really difficult to say they cannot do something. I do not even think they are trying to fool me, I honestly feel they are just ashamed of admitting they cannot do it.  So I would advise you to start developing some basic “Chinese non-verbal” communication knowledge. A silence will probably mean “we can’t”.

Tip #6. “Effective Communication (III): Make them recap the agreements, do not assume they understood just because you feel you were clear enough”
Communication can become a real challenge even when you are sitting face to face with your supplier. I have started developing my own “techniques”, so now I always ask them to rephrase themselves each point we agree on. It is a bit like forcing them to do “active listening”! And you would be surprised to hear how different their take on your clear instruction may be!

Tip #7: “Expect Delays in your Supply Schedule”
They just happen, and if you are not their biggest client there is not too much you can do.
In winter, some factories may see their power supply reduced… and they need to close some lines because they don’t have enough power to work full capacity. In summer, again, power shortage problems arrive. Residential housing has priority and AC takes a lot of the power supply, so you may also find they are not working full capacity.
I’m positively sure it is not a tale they’re telling me because I’ve been able to use other sources to verify this information.
Then you obviously have Chinese New Year when everybody goes home and things slow down for a few weeks.
All this is really difficult to deal with, because in our business, as in most cases, we try to work with low stocks and as much “just in time” as possible…

Tip #8. “Payment Terms… Once you build the business relationship things get easier”
This is at least my own experience. I have developed a good network of suppliers and managed to work on the relationship and trust. Right now, none of my suppliers requires me to do advanced payments.

Tip #9. “Pricing: Do not get obsessed with the cheapest deal”
If you need good quality you will need to pay for it. I am now working with reliable suppliers that deliver consistent quality 50% cheaper than what I would get back home. That works for me. I’m sure there may be cheaper options out there… but I think I am following the right strategy for my business.

Tip #10. “The perfect world doesn’t exist. I also have a supplier I would get rid of… if I could”
So, although I’m really happy with the supplier network I’ve built, there are always things you may not be able to control. One of my suppliers is extremely good from a quality and technical perspective, but he believes “a contract can be re-negotiated continuously”. I would love to get rid of him but, for that specific product, I’ve not been able to find anybody good enough to substitute him… He is in my replacement list, though!

Tip #11.  “Quality Control: Always, even with good established suppliers”
For some of our products I can make a direct assessment myself. Some others, though, have to go through certain lab tests. In those case, I always courier it back to our head office and await their feedback. It means we need to wait around one week for production approval but we have built that into our timings and processes.

Tip #12. “Problems don’t finish after production. Supervise Logistic Paperwork!”
You do not want your shipment stuck in customs because papers were not filled in properly (which happens quite often!). I always ask for copies of all documentation (BL, packing list, commercial invoice…) and ensure there are no mistakes. My piece of advice here is “Supervise!”

Quality Control, Quality Control, Quality Control. Can you hear me loud and clear?

Last week I was reading a post on the Silk Road International Blog with some very good advice from an industry expert on how to avoid getting into trouble when sourcing from China. I have to admit that I am really surprised that companies are still missing on two very obvious steps: quality control and production audits.

I’ve been interviewing China experts for some time, and there is one single piece of advice that they never fail to mention: quality control is a must and production inspections are more than advisable, especially with new suppliers.

Here are tips & quotes from some of those interviews:

Never relax! Even with good suppliers.
Production monitoring and quality control is still critical even when you work with your most trusted suppliers! The underlying issue is that our perception of what “acceptable” means is quite different. Your supplier may candidly approach you questioning why you can’t you take a product which is not meeting your specification if it still serves the purpose…”
from my post “7 Top Tips for Entrepreneurs Starting Business in China”- Interview with LinkPoint Europe.

“Be very strict with your quality control. You will annoy them but the loss is on you if something goes wrong.
I always go to the factory when my products are being made. I don’t tell them what day or what time, I just show up. When production has finished I personally inspect the product. I randomly inspect 10 to 30% of what has been packed. I make them open the boxes and I check the product is complying with the agreed specifications. I once made them open 300 boxes because I was not completely confident about the supplier.  They obviously don’t love it, it has a cost for them, but I don’t care. The loss is on me if something goes wrong…”
from my post “5 Tips for Negotiating a Dealing with your Suppliers in China”- Interview with Dalton Asia Limited.

I randomly check 15-20% of the final production for quality control, and reject anything that does not meet the agreed specifications. It’s usually not a problem as they always have excess production.
If you are dealing with a new supplier you must go for a production inspection”- Interview with Jennifer Patton from Asian Link

These are just a few examples of what experts based here recommend. But you don’t need to be based in China to fulfil this simple requirement. There are plenty of companies providing this type of service, so one wonders why buyers are still purchasing without QC and production inspections.