So I got an email from a client the other day, sending me a link to a blog post, which in turn linked over to a “blacklist” (a word I hate and never use) of Chinese manufacturers. The client wanted to know what I thought of “such things.”  Never one to miss a blogging opportunity, I told him I’d get back to him via the blog, so here goes.

The blog post is by the Enter The Panda Blog (ETP), it is entitled “The Blacklist” and it touts its “blacklist” as follows:

After years of sourcing, recording, researching and reporting, ETP has an extensive list of companies that we have identified to have been involved in and partaken in scamming their customers or mishandling their orders.

We have a database of over 3500 companies worldwide reported for fraudulent, scamming behaviour and mishandling of orders. To ensure that they are not trying to contact you or are already doing business with you, simply contact us here and we can check it off this database and let you know. This is absolutely FREE, no strings.

We believe as clients and customers your faith in your supplier should be solid and all doubts cast aside. So over the last few years, we have been constantly building and updating this database, aiming to bring you the most complete blacklist available for free on the web.

Every time we have researched, performed due diligence and audited suppliers and manufacturers, they have been added to our database.

It’s not all bad! We also have an ever increasing database of factories that we have personally vetted and done business with ourselves that we know you can safely do business with. We only work with factories that adhere to international safety and quality standards, and meet our requirements for the Panda Whitelist.

Color (get the horrible pun?) me skeptical.  Very.  And here’s why.

There are obviously good and bad Chinese manufacturers and there are honest and dishonest Chinese manufacturers. But there are also good and bad American/Western buyers and honest and dishonest American/Western buyers. Bad and/or dishonest American/Western buyers might threaten to add and then add legitimately good Chinese manufacturers to a list like this, simply because they are mad at the Chinese manufacturer for not giving them the discount they thought they deserved, or whatever.  I see that sort of thing all the time. We must get 100 requests to sue Chinese manufacturers for every one we actually take seriously.  Half of the requests we instantly “toss” as being too small to warrant attorney time, but we also toss a large number of them because we quickly come to believe that the super-angry Western (usually American) company is the one at fault. How was the Chinese company supposed to know that you “needed” your product in 20 days when the purchase order made no mention of that?  Do you really think your Chinese manufacturer has violated the contract by simply seeking to enforce it against you even though your company is going through tough economic times?  Do you really think your Chinese manufacturer is the one who should have know the particular requirements for product X being sold in Kansas?  I could go on and on.

Just about every time we do a post on China manufacturing problems or scams, someone leaves a comment saying that such and such Chinese manufacturing company did such and such to them. We delete all such posts because we do not think it fair for a company to be besmirched in such a way, without their having been any sort of independent assessment at all. I think the same of the ETP list. How does ETP verify its information?  How can it?

I am not saying such a list is completely worthless, because it probably isn’t. I mean, I definitely look at product reviews on Amazon.com (though I am certain some of them are rigged) and I also oftentimes review tripadvisor.com before choosing a hotel in a strange city.  But, those sites typically have so many reviews that the over-gushers and the overly-furious can be discarded.  Even then though, I still use the reviews as just one factor in my choice.  So I guess I am not saying that one should completely ignore something like the ETP list, but I am saying that it should be just one tiny factor in your decision on who to use for your Chinese manufacturing.

In Manufacturing Your Product In China.The Extreme Basics we recommended that you first “do tons of internet research and then narrow it down to 4-5 [factories] and then fly to China and meet with those factories.”  And if you are not willing to do that, we suggested you hire a sourcing company to do that for you.  Incorporating the ETP list as one aspect of your “tons of internet research” would be just fine, but relying on it as the holy grail is probably not a good idea.

What do you think?

UPDATE:  Just learned of a somewhat similar site called Tradesparency. This site consists of user reviews of Chinese manufacturers.

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Photo of Dan Harris Dan Harris

Dan is a founder of Harris Bricken, an international law firm with lawyers in Los Angeles, Portland, San Francisco, Seattle, China and Spain.

He primarily represents companies doing business in emerging market countries, having spent years building and maintaining a global, professional network.  His work has been as varied as securing the release of two improperly held helicopters in Papua New Guinea, setting up a legal framework to move slag from Canada to Poland’s interior, overseeing hundreds of litigation and arbitration matters in Korea, helping someone avoid terrorism charges in Japan, and seizing fish product in China to collect on a debt.

He was named as one of only three Washington State Amazing Lawyers in International Law, is AV rated by Martindale-Hubbell Law Directory (its highest rating), is rated 10.0 by AVVO.com (also its highest rating), and is a recognized SuperLawyer.

Dan is a frequent writer and public speaker on doing business in Asia and constantly travels between the United States and Asia. He most commonly speaks on China law issues and is the lead writer of the award winning China Law Blog. Forbes Magazine, Fortune Magazine, the Wall Street Journal, Investors Business Daily, Business Week, The National Law Journal, The Washington Post, The ABA Journal, The Economist, Newsweek, NPR, The New York Times and Inside Counsel have all interviewed Dan regarding various aspects of his international law practice.

Dan is licensed in Washington, Illinois, and Alaska.

In tandem with the international law team at his firm, Dan focuses on setting up/registering companies overseas (via WFOEs, Rep Offices or Joint Ventures), drafting international contracts (NDAs, OEM Agreements, licensing, distribution, etc.), protecting IP (trademarks, trade secrets, copyrights and patents), and overseeing M&A transactions.