How Beneficial is business with China

India is likely to impose a 14% duty on power equipment imported from China, said Vilasrao Deshmukh, minister of the country's Ministry of Heavy Industries, on last Friday.

Deshmukh said that the Ministry of Heavy Industries has asked the Ministry of Finance to levy the 14% import duty to protect domestic power equipment makers.

The ministry stated that power equipment producers in India are facing increasingly fierce competition from Chinese power equipment makers as the Chinese rivals sell at quite low prices.

Bharat Heavy Electricals Ltd and Larsen & Toubro Ltd are the top two manufacturers of power generation equipment in India.

We have been doing business with China for the last ten years or so and having been involved right from the beginning, I will relate some of my experience.

We started of with buying Duplex SS electrodes. We found that the price was about half of the prices of our reputed Indian suppliers. Naturally we had doubts regarding the products and asked the party to send us samples.
When we found the samples were acceptable, we place a trial order.
Ever since we are getting our Duplex electrodes from China, without a hitch.
Our experience with them was good.

We next bought a three roll bending machine for rolling plates.
Again the prices were half the local price. However, when we had problems with some software it took us three months to set it right.
The machine is presently running OK.

We next bought a 8 ton forklift truck. While it ran it was OK but when we wanted spares we are not able to get what we require, even after 6 months.
Not very good experience.

We have bought one VTL, which is being installed and another is in the pipe line. We found the party to be very prompt in their communication. However, either they or their banks are very smart.
Bank Guarantees are made in formats MT 760 and MT 799.
The beneficiary bank has no authority over encashment of the BG if issued in 799, they act just like post offices. However, if issued in 760, the beneficiary bank has authority.
The Chinese Bank issued us a performance BG in 799. In spite of asking them to issue it in 760, they continued issuing in 799, claiming they do not have the forms.
Neutral. We can give our comments only after the machines start running.

Recently we bought some submersible pumps from another Chinese vendor.
The prices were CIF Kolkata, payment through L/c, payable at sight.
Now, this vendor shifted the consignment to the port, took the B/L from the forwarder and then sent the document to our bank.
The documents reached our bank in about 10 days which we arranged to pay immediately.
This vendor charged us as "Loading Charge" through the Forwarder for the time the materials lay at the port as they asked the vendor to ship the materials only after they received the payment.
This is the first time we have encountred this falsehood.
We have been doing business with other European parties who despatch the materials without waiting for the payment from the bank.
Further, they booked the materials on a 40 T container as LCL when they could have easily booked it as FCL in a 20 T container.
When a consignment is booked as LCL about your materials comes through about 3 or 4 forwarding agents who each charge a price for endorsing the materials in your favour.
Your cost go up by more than 200%.
This is how our Chinese vendor hoodwinked us.
Very bad experience.
I have not given the names of the Chinese vendors.
If anyone wants it, I can give it to them.

So I would advise all those like the power sector and telecom sector people who propose to buy Chinese machinery to just THINK.

You may be getting it cheap but in the long run it is going to cost you more.
I would welcome any good or bad experience any of our readers have had with Chinese equipment.
I am sure, our experience is just the tip of the iceberg.