Midland manufacturers have been warned to apply caution when offered 'too good to be true' deals in China.

Many firms have fallen for a scam that can cost up to #10,000 after receiving bogus enquiries via email from the Far East.

The message normally says they wish the company to quote for a huge contract – normally in excess of #500,000 – and that they are required to go to China to meet those who are placing the order and sign contracts.

There are few negotiations and the bogus deal offers favourable payment terms. Once in China, companies are asked to pay a fee before the deal can be completed.

They are also required to host an expensive celebration meal. Once these monies are paid and the victim returns to the UK, the order never happens and the company is out of pocket.

Mark Eaton, director of the China Trade Liaison Office, based at Coventry and Warwickshire Chamber of Commerce, said: "Businesses should apply caution and utilise the help offered by UK Trade and Investment and the Chamber.

"Companies receive emails saying they have been found on the web and that they could be in for a very large order and unfortunately proceed without making the normal due diligence checks.

"My advice is if you get a message from China saying you have won a contract that is too good to be true then that is probably the case."