Is 3d-Party Inspection Reliable? Not Really

Three years ago, when our company was still in Songjiang, Shanghai, a colleague of mine spent six months working on a deal for 60 excavators and got a deposit from the client. But she didn't fully grasp how things worked behind the scenes in the industry.

When the third-party auditing company came to do the check, the auditor asked her for a bribe, and she refused. That really ticked them off. A few days later, she got a notice saying that the buyer was backing out of the deal. The reason? The auditor had submitted a fake report and had passed the order along to another company.

She had poured six months of her time and energy into this deal, only to have it fall apart in the end. It was a huge blow. She felt like the industry was just too shady, so she quit her job.

As someone with a management master's degree in China, I’ve never trusted consulting companies. Even though I’ve had years of Western management education and know some of it’s useful, I’ve also realized that when these concepts are brought to China, they get twisted in strange ways.

In China, third-party fraud is pretty standard. Take data survey companies, for example. They rarely actually go out and do surveys. Instead, they sit in their office, make up data that sounds reasonable, and create a report that satisfies the client. Making money this way is easy. Want real data? Sorry, you won’t find it! In China, there’s a whole system for faking data. Heck, even academic paper fraud has become industrialized. When I was working on my master’s thesis, a classmate told me that for 7,000 RMB, you could buy a paper and graduate without a hitch. I even visited one of these "paper factories" at another university.

Once, a high school friend invited me to do a survey interview. As a respondent, all we had to do was answer the pre-written questions and film a video to get 400 RMB. I thought it was ridiculous—it wasn’t a survey, it was just a performance, so I said no. But my friend got the 400 RMB.

China is full of these hidden rules. If you refuse to play along, you’ll likely end up as a failure. And yeah, I’m one of those failures.

Third-party audits are part of what survey companies do. In China, they take your commission and also accept benefits from the company being audited. Typically, the company being audited will pay them to say nice things about them. The more they get paid, the more they praise the company or prioritize them.

There are also old-school business habits, like drinking together until they're drunk, and then arranging for the auditors to have a good time afterward. The bigger the contract, the more these things happen. Of course, you’re the one paying for it all. The further north you go in China, the worse these hidden rules get. That’s why I prefer doing business with companies south of Shanghai, unless they really don’t have what I need. Think of Shanghai and the Yangtze River as a dividing line—north of Shanghai represents traditional China, and south of Shanghai represents a more modern and open China.

A lot of people go to places like Beijing or Xinjiang to shoot videos, thinking everything looks great and the people are so down-to-earth. But in reality, the people filming the videos and the ones in them are probably national security officers or actors. I’ve never seen ordinary Chinese people as energetic and lively as they appear in those videos. The life of an average Chinese person is exhausting. Really exhausting.

I’m not a fan of drinking, even though many people think drinking baijiu means you're outgoing and drinking red wine means you’re classy. But I just can't stomach it. I'd rather grab a bottle of Coke from a corner shop and sit quietly at my computer by myself.

When I do third-party audits for foreign clients, I always do it under my personal name, not as a company rep. I believe personal reputation is more important than a company’s brand because a company can shut down anytime or shift the blame, but once your personal reputation is damaged, it can ruin your whole life. I don’t accept bribes from the company being audited. When you hire me, you’re my only employer. In China, third-party companies might betray their clients for bribe, or if they don’t get a bribe, they may try to sabotage the sales company. The hidden rules are everywhere. That’s why I’ve focused my energy on foreign trade. I want things to be simple and transparent, without all the hidden rules pulling the strings.