Fraud exists in all countries and certainly you can find fraud in China. This CNN article notes a huge privately owned Chinese company, DJI, which found that at least 29 of their employees had colluded to defraud them and their customers of money. Consider what it takes to get 29 people to work together to secretly bilk their own company for what comes to at least US$150M. Western companies in China are losing more than they think they are and finally do not take action that could lower the incidence of fraud.
Fraud in China – Let’s Prevent
‘Garbage in garbage out’ comes to mind.
DJI started out small and hired friends and relatives to prevent fraud. Then they got bigger and hired whoever could serve them that looked smart. Many of their hires were smart, smart enough to organize 29 people to steal money by inflating charges to customers. 29 people colluding means no system you have can protect you. The finance. purchasing, sales, and production can collude together, and you never know where the money went.
The first and most important step is to hire people who are honest and want to do real work to earn honest money. If you do that, than the systems you set up will be good and assure that you do not tempt honest people to commit fraud. I guarantee you that resumes and interviews cannot save you. They certainly were not enough for DJI. I learned that they are not enough. Then I started my own company to help others to avoid the result of fraud in their own company. We can find you honest people of talent in every specialty and field in China. Digging them out and knowing who they are is the hard work that my company gets done. See also What Recruiting Risk Do You Want to Bear?
What Do You Do After Fraud Happens?
Western companies in China almost universally respond to fraud by letting the person go quietly and then covering up what happened. The result is these people and their friends know that they are safe stealing from the Westerners. DJI notified the police and is criminally implicating them. That gets them justice and makes China a better place. It further will protect them. Who will dare to try to steal from them now that those people will go to jail?
So two key steps. First, keep the theft in China outside your gate by committing to hire only Trustworthy Talent® for your company management. Second, if you find fraud, go to the police and seek to get them punished.
Fraud in China does not have to be so bad. We can leave the cheaters at home with no good job and put the real talent to work. That is what we do every day for our clients.