Most Chinse shy away from L/C mode of payment when entering negotiations and insist on T/T mode
Is it ignorence? Is itFear Of Unknown or plain lack of Confidence?
Or they can not meet deadlines of delivery inherent in L/C terms?

Replying to [nalavade]:Oh, your information is worth considering.Thanks.
Sixer

Replying to [sixer]:Dear Sir/Madame,

In responding to your question:

Most Chinse shy away from L/C mode of payment when entering negotiations and insist on T/T mode. Is it ignorence? Is itFear Of Unknown or plain lack of Confidence? Or they can not meet deadlines of delivery inherent in L/C terms?

I must say that it is mainly because many of the companies are either foreign owned or because they have been stung so many times in shipping product out of the country and not getting paid that they have gotten wise and decided to ask for the money up front. They also realize that because the prices on many of the items are much lower than in the countries where the purchases are growing that 9/10 the purchaser will pay up front to get the product.

As a side note most of the people working in those companies also work on commission and so you are actually paying their wages which they really need up front and not 30 to 120 days down the road as some companies like to pay; and if you default on payment the individual that sold the goods to you actually has to pay the company back for the "bad" business transaction that they made even though you are the one responsible because many of those companies have never even heard of insurance due to the fact that the insurance companies in the rest of the world consider them such a risk that they will not touch them.

As far as meeting deadlines we have never had any issues but then again we also run a large volume of product through our manufacturing lines there and have it planned out many months in advance.

Does this answer your question(s) ?

Replying to [balu1234]:Right ,I agree with you.

Replying to [soloken]:No, dear Soloen, Irrevocable L/C can not be denied later.
Sixer

Replying to [Elva]:Banking rules are applicable to all.Not only Chinese, lot more poeple do not speak good English.But they do not prefer TT either.
Any comment?
Sixer

Replying to [sixer]:

It is because China Company they do not want to wait a long peroid for the payment in L/C. Moreover, they DO NOT know how to handle the L/C. Besides, some companies is not the real registered company. Thye do not have the right to handle the L/C.

However, if you pay them in T/T, they can surely get the your money immedately even they are not the real registered companies.

Hence, the taxation in mainland China is quite complex. If your supplier(s) is not the real registered company, or they do not have the right to handle the L/C.

Jacky

Replying to [DDJacky]:Thankyou for your opinion.But China should move ahead with reforms.
Sixer

Replying to [hellojasmine]:

That's true.

Besides, by T/T saves much bank charge for both buyers and sellers.

Replying to [diamond]:Do you not think that buyer has right to feel secure?
Sixer

Replying to [sixer]
we are an Austrian trading company and doing business with various chinese companies for the last 16 years. We never met a shying chinese business partner. We are always using L/C as payment tool. I guess that they are really keen and smart in business and well aware about the fake enquiries and just try to avoid surprises.
Regards
agmaustria