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Due Diligence on Chinese Company: How to Investigate the Human Resources of a Chinese Company?-CTD 101 Series

Fri, 23 Dec 2022
Contributors: Meng Yu 余萌
Editor: C. J. Observer

If the company does not have the human resources to match the deal, you may be defrauded.

This post was first published in CJO GLOBAL, which is committed to providing consulting services in China-related cross-border trade risk management and debt collection. We will explain how debt collection works in China below.

If the Chinese company you deal with claims to be a manufacturer, then enough staff must be equipped for its production.

If there are no employees at all, you’re likely to run into a shell company. This also means that after paying a deposit to the company, it may not be able to deliver products to you.

So, how do you avoid that?

You need to know the HR status of the Chinese company through due diligence. Without the company’s cooperation, we can also get a preliminary understanding of the size of its employees.

First, we can get to know their contributions to social security for their employees.

Although many Chinese companies intentionally do not contribute to social security for certain employees, larger manufacturing companies typically contribute to social security for most employees.

Therefore, if we know how many employees Chinese companies pay for social security, the number of employees will be confirmed at large.

Second, we can get to know its recruitment situation.

There are many Internet recruitment platforms in China, focusing on different types of businesses and positions. Most Chinese enterprises will have their recruiting information on these platforms.

Through the recruitment platform, we can learn what positions of staff Chinese enterprises have been or are recruiting, which can help us to analyze its operation.

Third, we can investigate their employees’ views about the company on social media.

China has some comprehensive social media, as well as those specifically for anonymous reviews of employees towards their companies. From these social media outlets, you can learn what employees think of the company.

Most of the time, of course, criticism is dominant. Most people comment only when they want to criticize. These criticisms may not be necessarily neutral, but they can provide valuable information.

 

 

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(3) Judgments and Awards Collection
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Photo by Max Zhang on Unsplash

Contributors: Meng Yu 余萌

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