China is a severely overpopulated country, and it’s economy is emerging stronger than ever. More and more Chinese have access to the internet, and are creating new international contacts, new business, and new global contacts and investment opportunities. Yes, China is booming! Many around the world are trying to access and profit from this exploding market. Often, investors are rushing in without doing their due diligence and research prior to making an investment.
China is known as a country with low quality products, difficult living conditions, and the cheapest labor force on the planet. Exploitation is nothing new in China, and fraud is now joining the ranks which is tarnishing China’s reputation in the global market. China fraud and scams are now growing on the internet, as Chinese criminals learn there is significant money to be made.
Recently, the Chief Executive Officer and the Chief Operations Officer at Alibaba- China resigned after admitting that over 200,000 customers had been defrauded. Accordingly, the executives were not involved in any criminal act, but sales personnel and managers were allegedly involved. The executives took responsibility and resigned. This is one of thousands of examples that is more and more common in China. False companies are being registered and marketed to American investors. Fake stocks are being “traded” on Chinese exchanges. Professional looking website now bait potential victims to invest in fake companies in Shanghai and Hong Kong.
China investigators urge investors who are interested in China to go in knowing the risk, and to consider a professional background check investigation or due diligence to reduce the high risk here. Keeping your fingers crossed and hoping for the best can produce serious damage to your own finances or your company, and can be a dangerous game to play in China. Whether it’s an investment in gold, a potential partner company or supplier, or an online romance, investigators say it’s never been more important to take a time out, and contact a professional.
International investigators recommend guarding your personal data and not revealing any sensitive data about your company until you are certain you know who you’re dealing with. Verification services can serve as valuable tools to help you make an informed decision and avoid the China scams and fraud, which are growing by the day. So far, law enforcement in Beijing and Hong Kong has yet to make much progress in stopping this growing problem. As in other parts of the world, law enforcement is one step behind online criminals, so prevention remains the priority.
A. Hathaway has 20 years of experience in global fraud prevention, international investigation and background checks for corporate and individual clients. He serves as a consultant for investigation firms in the Americas, Europe and Asia, and has been a senior investigator for cases in over 30 countries. He is considered an expert in risk mitigation and global due diligence.