PANDEMIC AND THE NEW TRADE PARADIGM:
Why the Auction Market Is Replete With
Scams, Inferior, Unsafe and Fake Products.
By Siva Yam, CPA, CFA, President
and Paul Nash, Ph.D., Contributing Editor
United States of America-China Chamber of Commerce
U.S.-China Chamber of Commerce now provides assistance in
procuring Personal Protective Equipment (PPE)
With its extensive contacts in both the U.S., China, Hong Kong, Vietnam, Singapore and other countries, USCCC has been assisting many U.S. companies and entrepreneurs in procuring personal protective equipment (PPE) including face masks, face shields, gloves, hand sanitizers, and others. The market is filled with scams, poor quality products, and USCCC is using its best efforts to help U.S. buyers navigate the process.
USCCC is taking the following approach:
Make contact directly with reputable manufacturers
Make contact with authorized distributors
Work with agents that USCCC has long term relationship with and has the financial resources to undertake the task
Identify PPEs that are already in the U.S. so that they can be inspected, purchased in small or large quantity, and shipped instantly or within less than a week - the buyers can inspect the goods and will not be burdened with logistics or customs clearing. For instance, we have identified NIOSH and FDA 510K certified N95 face masks currently in New York.
Create group buying for small orders to achieve quantity discount and low cost shipping
For further information, please contact Mai Hoang at email@example.com or 312-368-9029.
PPE Scams Continue and How to Avoid Them
Almost a year since the first case of Covid-19 was confirmed, the demand for PPE has not shown any sign of slowing. Along with the strong demand we have seen an increasing number of scams. First, they were face masks, covid-19 test, ventilators, and now they are all about gloves. While the demand for many PPEs remains strong, the abundant supply coupled with the crack down by the Chinese government have essentially kept scammers involved in face masks in check. However, when it comes to “gloves,” it is another story. The influx of scammers in gloves are due to the following:
There are many speculators who regret that they have missed the opportunities in the summer when there was a disparity of supply and demand. Hence, with a compulsion to make quick money, they become more willing to take chance. Many of them also believe in their own capabilities in understanding the market and are prone to be scammed.
Face masks are considered critical in minimizing the spread of covid-19, and the Chinese government had offered significant incentives and subsidies for factories to produce face masks and in a very short period of time the supply has surged.
When the Chinese government had become aware of the quality and scam issues, they took decisive actions to regulate the market – only registered companies and factories are allowed to export PPE; they created “White List” and “Black List” to qualify factories; all PPEs have to be cleared with the Chinese Customs before they are allowed to be exported; all PPEs have to be properly labelled with detailed information inside the packaging.
Chinese manufacturers typically did not like to sell gloves. The value added is low; the profit margin was not as high as the face masks; the shipping cost could be expensive due to weight; and there was very little or no incentive by the Chinese government.
There are a limited number of glove manufacturers in the world. Expanding the capacity will require larger investment than in the face mask industry. It is further constrained by the supply of raw materials. In addition, they learn the lesion that the price of the PPE could drop within a matter of the blink of eyes just like face masks, hand sanitizers and hence are unwillingness to increase the capacity just for short term demand.
While face masks are primarily produced in China, gloves are mainly in many developing countries in Southeast Asia. With a less developed trade system and lesser regulatory oversight, the industry is much more difficult to control.
The factories themselves are sometimes not transparent. On one hand, they alert their customers and the general public about the scams, but on the other hand, the messages sent out by them are less than being clear.
In general, when someone offers large quantity at competitive pricing, often below the prevailing market, they could be scammers. However, a world that the desire to make quick money dominates, someone seems to ignore the warning sign and miscalculates risks.
Scammers impersonate the Chinese Consulate
I received calls from Chinese speaking callers impersonating the Chinese Consulate and actually almost fell into the trap. After talking to him for a few minutes, I found his statements were conflicting. Further research has confirmed that it was a scam.
[Announcement from Federal Trade Commission]
Scammers impersonate the Chinese Consulate
We published this scam alert several years ago, and today, we still receive this kind of scam almost once a week. In fact, a few of our members actually paid the "agent" to register those domain names, and as predicted, the "agent" never followed through.
The scam begins with an email, written in English and addressed to the president of the targeted company. They present themselves as accredited Asian registration agents, mainly in China. The scammer notifies the targeted company that one of his/her clients wants to register domain names containing the name of the target. For “ethical” reasons, the "agent" offers to register the domain in the name of the target instead of his/her client first. The prices tend to be insignificant. The scammer threatens to proceed with the domain registration for his/her client if the target does not purchase the domain names quickly. Once when the target sends the money, the scammer disappears.