16 October 2017

Africa: 'Flexible Mediation' in Chinese Province Strengthening China-Africa Trade

Yiwu City — A trade and commerce mediation committee established in 2013 to probe misunderstanding between Chinese businessmen - manufacturers or middlemen - and foreign exporters or traders is making "significant progress" in a major import-export concentrated city in Eastern China.

The mediation committee, comprising of Ethiopians, Sudanese and Chinese nationals, is based in Yiwu City, a coastal Zhejiang Province in eastern China.

The province also has the second largest African community in the entire China. There are over 3,000 African residents living in the city. Guangzhou, in Guangdong Province - southern China, has the largest African community.

Merchants from over 100 countries are based in Yiwu city. Most of the mediators are African merchants themselves living in the city and they too are traders who export tones of commodities back to the continent.

Along with several other qualifications, a mediator on the committee must be a multilingualist also capable of speaking Chinese, should have a clean record with the Police and an impeccable trade record in the city.

Known as the "world's capital of small commodities." Varieties of household utensils, accessories and textiles are produced in the region.

The province also exports tens of millions of Chinese products to African countries.

In over four years, the mediation committee has arbitrated and settled over 450 cases worth over 52 million Yuan (about US$8 million) with over 30million Yuan (about US$4.6 million) paid back to complainants.

The committee, officially known as the judicial office of International Trade City, has reduced the number of case investigated by the Police in recent years.

It says it objective is to further ease emerging disputes between Chinese traders and foreign consumers in order to smoothen the path of trade transactions.

It has also help mediated with law enforcement authorities on behalf of merchants whom visa or legal travel documents expired.

"Our success rate is 97% in settling dispute and our method of mediation is well received by foreign and Chinese businesses," Chen Jin Yan, director of the mediation committee, told African journalist on October 14 in Yiwu.

"We help both party to get settlement by applying three principles which include finding out which country law should be used and if we cannot specify which foreign country law to use, we apply Chinese law," he said, adding that the committee tries to maintain fairness in order to give confidence to foreign traders seeking mediation.

China is Africa's largest trading partner - this means, Chinese manufacturers or middlemen must transact directly or indirectly with their African customers to keep transactions afloat.

Some of these transactions sometimes fall short to allegations that continue to fuel misconceptions about Chinese commodities on African markets.

The most occurring cases include cultural disputes amongst traders and Chinese and the quality of goods, Yan said.

He said when violators are investigated and found liable they are sentenced to prison and money repay. In the case of the quality of goods or products, he said complainants have to present a case proving that they are unsatisfied with the specifications of goods.

"In that case, when we received the goods (as mediators) the committee intervenes and check it to see if it is the same in the contract," he said.

Intercontinental trade generates millions of dollars of profits for investors and millions more in revenue for governments on both sides of the trading chain, but challenges like the ones mediated in Yiwu often led to prolonged litigations and create loses for both sides, slow trade and affect people-to-people interactions.

Sometimes deals are unfavorable for any side or hiccups threaten transactions. Market observers say, bad deals lead to commodities or capital failing to flow across the transaction chain, quality for money is not obtained or accusation of fraud would mere transactions.

Chinese provinces with huge volume of exports to African countries seem to be working frantically to limit some of the disadvantages dogging trade transactions and the progress by the Yiwu mediation committee seems to be building momentum year-on-year, strengthening trade between China and Africa.

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