It is better than its reputation: How the Corporate Social Credit System (CSCS) can be useful for a foreign company wanting to procure protective masks in China, such as those now needed by the million worldwide.
As of 27 April 2020, masks will be needed, for example, by over 80 million Germans to comply with their obligation to wear one in public places such as supermarkets. According to Chinese government statistics, about 120 million masks are produced daily in the republic. In 2020 alone, almost 18,000 companies have been newly registered who are allowed to produce and sell masks for medical and community use.
But how does a foreign company looking to source masks or other medical equipment in China make sure it finds the right partner among the hundreds of thousands of companies producing what it needs? This is exactly where the newly established CSCS is useful. China’s CSCS includes all companies registered in China and it sanctions those who do not comply with relevant laws and regulations.
If you want to procure products in China, we can support you in examining business partners as part of the Corporate Social Credit System. Richard Hoffmann, Lawyer, Partner, ECOVIS, Heidelberg, Germany
In order to make sure a partner is trustworthy, has the licenses they claim to have and the means to actually export the ordered equipment, companies must first check their potential partners. The easiest way is through official government channels. The Ecovis team is here to help companies interpret the information given.
Obstacles when sourcing in China
If together we find the potential partner reliable enough, companies can then take the next step and place an order – but only then! In the end, this can save companies a lot of hassle, costs and other resources.