Deal with China? EBMA has a warning for you - BikeBiz

Deal with China? EBMA has a warning for you

The European Bicycle Manufacturers' Association - run by Cycleurope's Brian Montgomery from an office in Paris - has been owed $27k by the Shanghai Bicycle Corp, a state-owned manufacturer, since an anti-dumping court case in 1993. No cash has yet materialised so Montgomery writes "we feel obliged to bring this matter to the attention of a wider audience." He's gunning for the CEO of the Shanghai Bicycle Corp but has wider points to make against dealing with Chinese companies in general...
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In an open letter to the global bike trade, entitled 'A sad warning report on dealing with a Chinese company', Montgomery goes public with an unpaid debt of $27 578 from 1993.

Here, in full, is Montgomery's letter:

In September 1997 the European Court of First Instance dismissed in it’s entirety, the appeal lodged by the Shanghai Bicycle Corp., which is State owned, against the European Council and the EBMA - appealing the anti-dumping decision of the Council on Chinese bicycles of September 1993. The Shanghai Bicycle Corp. had entered it’s appeal on the last day allowable in December 1993. The Court awarded costs to the EBMA and an invoice for $27.578.00 was quickly sent to the Shanghai Bicycle Corporation.

They have never paid. Their tactics to avoid payment are unfortunately familiar but with an occasional strange twist. There are long silences ( do they hope that we will go away? ) - the person who handled the file is now retired - or posted away - they cannot find the papers - then given full copies they promise action very soon - and follow with more long silences ( the twist is that they sent in March 2000 a cheque drawn on the Bank of China/New York for $28.00 - strange - the cheque was immediately sent back by us as a provocation ) We have appealed personally to Mr.Chen Guo-Qiang their CEO but he has never replied. We have been passed most recently to Mr.Hu Wenshen who has unfortunately repeated the delaying tactics of his predecessors. China has a huge balance of payments surplus with the EU and an even bigger one with the USA - they had a near doubling of bicycle exports to 55 million last year - so the Chinese state cannot plead lack of funds. They now have a Chinese bicycle manufacturers association ( which appears to be government subsidised ) and recent press reports have claimed that they are looking covetously at the 15m. EU bicycle market. They are already making surreptitious bicycle exports which shriek of deep dumping prices - plus they are re-commencing the illegal A + B container business. Unfair tactics seem to be part of the game plan. They have had anti-dumping duties applied on bicycles since 1993 and on parts since 1995. This reluctance to pay their debts - in this case ordered by the European Court - is familiar as being the practice of back-street operators - but here we are dealing with an industry leader owned by the Chinese government - and this is not the sort of conduct that one expects at that level. Legal advice received on the possibility of trying to get payment via the Chinese Courts is that it is extremely rare for a foreign company to get any decision in its favour - and there is no record of a decision against a state company. A move in this direction would, in view of the sum involved, even in the event of the outside chance of winning, probably result in a Pyrrhic victory - the costs would equal the gains. We are now pushed to take other steps. Seizure of their property is an option. We shall now seek support for our legitimate claim from the European Council, the European Commission and the European Court. Too much time has passed without payment. The above is a cautionary tale to anyone who is thinking of dealing with the Chinese bicycle industry. As you see they have an attitude to debt which is completely unacceptable. Imagine a serious, quality claim, or insurance claim, or recall of product on Chinese bicycles, responsibility for which by EU law devolves to the manufacturer. By this evidence - is there not a large doubt about responsibilities being correctly covered ?

In a spirit of reasonableness we have not claimed for the lost interest on our costs but this situation cannot go on much longer. We feel obliged to bring this matter to the attention of a wider audience.

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