Ok, so here is a learning lesson for people about China. There are many competing agendas in every level of business and government.

If a factory buys a large amount of raw materials and/or starts fabrication on goods that are not fully paid for by the client then they may not be able to sell them.

There is signifcant risk at the factory level if they produce an item that is not purchased by the buyer. This risk can be equal to hundreds of thousands or millions of dollars. If they need to liquidate the goods or material then it will be sold for much less than they paid for it (most often).

This can be a financially crippling disaster that may result in shutting down the factory or bankruptcy.
Generally speaking, the more custom the project is, the more risk the factory takes on by accepting the order.

For a factory to accept any large order without knowing if the client will pay for the LC without rejecting documents submitted or pay for the balance of an order is a HUGE RISK to take and is irresponsible. Many factories have been burned by fly by night clients that do not follow through on their commitments and/or do not pay for goods that were sold payment against B/L that arrive at port in the destination country.

There are risks on both sides of international trade that must be considered, not just the client side. It is important to understand both sides.

Jonathan

Replying to [importghuru]:Thanks for your warning.
Good luck for everyone.