The Pride of Echizen Merchants
Fukui City, Fukui Prefecture.
Back when I worked at a UK-based credit reporting firm that sold investigative reports on foreign companies, I traveled all over Japan in search of new clients. At that time, the Hokuriku Shinkansen hadn’t opened yet, and I had never been to the Hokuriku region. Eager to explore, I made a lot of appointments there. Coming from rural Akita, I naively imagined the three Hokuriku prefectures as close together—like Kanagawa, Tokyo, and Chiba—and ended up scheduling chaotic meetings from Fukui to Toyama, then Toyama to Kanazawa, then on to Himi, Imizu, and Takaoka. Some meetings had to be cut down to just 20 minutes due to train schedules. A mess of a business trip—but I always had a great time.
When I visited this particular company in Fukui, it was a frigid winter day with heavy snow. I walked down Phoenix Street, turned at the intersection called “Ote,” crossed a bridge, and arrived at a gleaming, grand head office. It was one of the major local trading companies that truly represented Fukui’s industrial strength.
(From that bridge, you can see the Hotel Rivage Akebono. I stayed there three times—the open-air bath is wonderful.)
80% of Sales in China
This chemical trading company was experiencing tremendous growth at the time, with their expansion into China significantly boosting the group’s overall performance. Their business model was featured in economic magazines as a success story, attracting national attention.
By then, I had graduated from a flashy rookie to a somewhat more mature professional in my late twenties. By the time I arrived at the headquarters from Fukui Station, my beloved made-in-Italy boots were soaked from the snow—an utterly miserable appearance.
(There’s a standing soba noodle shop just outside the station gates. The broth is unique—different from both Shinshu and Kanto styles—and it’s delicious.)
“Oh, so you’re Mr. Nakamura? You came in that outfit?” I was greeted by the internal audit manager, perfectly dressed in a sharp, slim-fit suit befitting the glitzy office. From that trip onward, I learned: when traveling to Hokuriku in winter, wear a suit with long boots. The weather changes so often that even if you forget your lunch box, don’t forget your umbrella. A foldable umbrella is a must.
“Nice to meet you. I’m Nakamura from an overseas credit investigation firm,” I began. “We specialize particularly in Chinese corporate data.” My enthusiasm for the meeting warmed me up as my wet clothes slowly dried.
At that time, the Chinese company reports we handled were unrivaled. The largest player in the industry had been publicly punished and barred from obtaining financial data, meaning we were practically the only provider able to deliver solid performance data on Chinese companies. Plus, we offered reasonably priced Japanese-language reports, so proposals almost always led to sales. It was our ace product.
“So, please consider using our service too!” I said. Victory was in sight… for about 10 seconds.
“Mr. Nakamura,” the audit manager replied, “Eighty percent of our revenue comes from Chinese companies. If we use your reports and they come back with low scores, and we can’t make sales—then what?”
My around-thirty self was speechless. Completely thrown off.
Traditionally, credit reports are meant to expose potential risks and help clients minimize those risks by setting aside reserves or reconsidering transactions. But this logic didn’t apply here. Chinese clients were gods—the source of 80% of their revenue. To question or cast doubt on them might risk losing those blessed profits. How dare I suggest such a thing?
“But surely, you can’t conduct business without understanding the risks involved?” I pushed back. But by that point, I’d already committed sacrilege against their gods—blacklisted. Unfortunately, I couldn’t convince the manager to use our reports.
Bankruptcy
That major trading company eventually collapsed. The cause: over ¥10 billion in bad debt due to outsourcing credit management entirely to their China operation, and inflated revenue figures from fictitious circular transactions at a Chinese subsidiary. The company was later absorbed by another chemical manufacturer, rebranding under a new name and continuing business.
If only I had explained the importance and value of capturing information more effectively in writing back then…
If only I had suggested even a simple background check of their key counterparties…
How can we call ourselves information providers if we fail to help companies like this?
Even now, I’m still involved in delivering credit reports on foreign companies. This remains a formative experience—a constant reminder of why I provide company information to clients.
Postscript
Back in my “around thirty” days, it certainly made sense to obtain Chinese company reports and use the information wisely. But now that I’m well into my forties, the external environment has changed significantly. I find it increasingly important to ask: Can we really trust Chinese corporate data based entirely on information released by Chinese authorities?
To everyone reading this: please be cautious not to analyze a transaction partner in isolation. Always take a holistic view—look at parent companies, affiliates, their board members, and even the shareholders of related firms. Follow the trail. If you do, you’ll often find that ultimately, all roads lead to the same place.
