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? Feb 16, 2007 Dear Friends, To-day , eleven months after I post this topic, i can feel proud that a large number of members have put forward their views, some of which are really thought provoking. Let us now start thinking and suggesting what are ways and alternatives to this trade barrier of sorts, so that more trade is encouraged and everyone feels secure. Sixer

Replying to [sixer]:

Dear Sixer,

You're right. They don't seem to negotiate other payment methods except T/T. We also are working from China in lighting business.
It is the same for us,too. To my impressions, they learn foreign trade newly, most of them can't speak English well,.they promise very easily to do what you want on production,quality,delivery,shipment etc. to have the business from you. Most of them don't have their own export licenses and they use other companies.

Further L/C brings strict rules for them and as they know their way of action in trade, they are afraid of being late to fulfill the conditions and terms of the L/Cs.

But this is a fact that they learn too fast and the bosses are very young.Each time we found them a little bit more qualified.
I hope they will also accept other payment ways,too, in the near future..

Good Luck with your business..
Best Regards
Yarenimex

Replying to [sixer]:

firstly, i have a question. why do you select the L/C as your payment?

if you have the difficulty of capital, maybe the supplier has it too.

i think the key is credit standing. both of us need the time to know each other better. so let's begin from the small order to give both of us some opportunity to know each other clearly.in our China. International business is very popular now, but the insurance of international payment hasn't been established completely.
some one don't know your bank ,your custom well. we still need more time to know the world.

Replying to [allenscafe]:

I sell raw material to China and the Buyers always insist on L/C.
I guess it's not their ignorance or lack of knowledge, I guess it all depends on which side you're on.
If you become a Seller, you will try to get T/T as payment terms but if you are the Buyer you will insist on L/C upon the reason of (your money) safety

Replying to [trado]:
Sorry, I do not agree with you. I am very comfortable with L/C terms, because I know that if I perform as per contract, I will get my money.
Sixer

We are a mainland China manufacturing company but are run by Americans. The service that you expect and the quality that
you demand.
We as all mainland China manufacturers, do not stock merchandise.
And only go into production when an order is placed.
Now, most manufacturers do not produce 100% of the materials
that they use to manufacture product. Hence, we have our suppliers
too. Suppliers who mnfctr. certain components that we use to
produce product. IE: we buy "flash" directly from Samsun in Korea,
and they have their MOQ's as well.
To go from L/C to L/C, this takes time and money.
And I'll tell you, about half of our clients ask us if they can wire
their payment through Western Union.
This is trust at it's finest.
Out of the many world-wide companies that we supply to, we only
have 2 that pay via L/C.
Also, we will only do an L/C of orders of $100,00.00 & above.

Normal payment here ( mainland China ) is T/T. Do not mistake that.
On large orders we require a deposit, T/T ( deposit obviously cannot
be an L/C ). And then the balance is due upon completion of production. And again, the norm here for the balance is T/T.

Hope this clears some things up.
I'm from Los Angeles, by the way.

Replying to [trado]:
Replying to [trado]:
to be, or not to be,that's a question. hehe
frankly, L/C at sight is a better and securer payment than others in my opinion. also it requres us to study the L/C more carefully and obey it strictly. and the question is the credit of the bank in the buyer's country i think. people always assume the credit is better than others in developed country.
so some supplier will accept the L/C as payment without any hesitation if it is from some developed country. why?
because they know their credit is good.
so i said we still need more time to know you further.
personal view.

allen

Replying to [sixer]: I have only one thing to say on this subject, and that is to vote with your feet. Not every single China vendor insists on T/T. There are many quality vendors in China who are prefectly able to abide by L/C terms. If you refuse them for your pricing considerations then that is your perogative.
It is true in any country that many vendors prefer T/T especially when they have no prior business relation with you. I do not believe this is unique to the China market.

Replying to [allenscafe]:Means Chinaes has no credit with their bank

Replying to [hirenapatel1980]:Replying to [sixer]:many factories in China ,have few experience of export and trade ,they late the professiaonl person handle L/C ,also many facotries have no export authourity.so if you want to open L/C ,it's should better choose a big trade company ,they are professional for this

Replying to [hirenapatel1980]:We are a manufacturer in China , we have many Indian customers. We usually request T/T in advance at the first order for getting the payment safely, after first order we accept L/C. Because we know that there are many foreign banks are private,it seems not so safety. If you can open the L/C in famouse bank, I think most of Chinese businessman can accept it.