Replying to [sixer]:

Dear Sixer,

I have read your statement of payment preference and it is indeed true that China in our ever evolving world is moving slowly to the for-front of many industry. The probable reasoning for their payment preferance is simply the worlds expectation of China vs: the abuse of China past. The west as it is known had for many decades abuse China's people as cheap labor. Another reason is the immaturety of the business associate and their inability to negociate a greater challange. The finance and marketing arena. In there unwillingness to do this they demonstrate an immaturity and a greater vulnerablity to each other. Many beleive that china's people choose to have the funds TT because they are working in a more simplified enviorment with fewer difficulty.
In summary: China is simply evolving and the word needs to be patient with her if we wish to trade with her. After all one only need compare GNPC to know why china insist on TT payment. Simply put the smaller and some larger business revolve around the need to guarantee cash flow in the immediate and not the "maybe" future. In other words it is a " Guarantee"d Buckaroo" !!!
Truly,
Rod Hopkins
USA
aka: thepuppy@alibaba

Replying to [sixer]:Somehow raw materials in China in very tight, and suppliers can't hold the payment in certain periods since crue oil price up, all factory & seller need to pay all in advance, then those needs confidence and at least no lost at the beginning.

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) ?

Best Regards,

Michael P. Levesque, P.Des., CET, EE, BCTE, M-IEEE
Engineered Systems Incorporated, President & CTO

Replying to [sixer]:
My experience with that issue is that the steps taken to verify TTs are more interactive which minimizes the potential for theft in that purchase

Respectfully

LesterVWilliams
Jazz2Boothus

Replying to [sixer]:China not prefer TTs but some traders of chine do prefer. In the terms of business, LC is secure when a bank is involed in to. For TTs mostly people prefer for the assurance of unknown or for the sake of sefl-satisfaction.

Replying to [Leoncino]: Seriously, why do you want a fast but insecured way of doing business. Sure its easy fast convenient, but what good does it do to the buyers when you ask them to do T/T. First time buyers will not trust you wholly and this is common sense. May be after a few shipments, T/T is reasonable, but for first couple of shipments, I don't get why you can't understand the buyers' anxiety. Don't go for the easy way of doing busines if you want to get worthwhile customers. Buyers will always look for ways to transfer their money where they get a guarantee of arrival of what they are paying for..

Replying to [sixer]:

its upto buyer country, usualy i noticed china prefer lcs,
if some one not accept lcs, and ask for advance payment or tt
then you have to be carefull before sending money, finaly its confirm
china doing export on lc basis.

Replying to [adamantinex]:

Yes chinese were fun of TTs ssomehow unfair TTs. You order from them they say all TT. When they order from us they say 30% TT 70%L/c. I have have chinese friends, and one thing I noticed from them when it comes to business, WISE. That makes them successfull business people.

Replying to [sixer]:Hi Sixer,

I have been importing Medical goods from China for some five years now and have had my share of experiences about this particular issue but it is a situation we have to live with.

The Chinese business has as many tarnsaction modes available to them as any other business in the free world. To understand their love for T/Ts let me dig into a little history.

Chinese populace had been closed to to the outside world for centuries and fed on propoganda which was very anti foriegn and as a result the common chinese feared the outside world from its co .The direct result of this fear is an inborn mistrust of foriegners as a whole.This mistrust reflects in the way they do business and even conduct themselves.(ever had an expreince with a Shanghai or Beijing cab driver)

T/Ts offer complete security to them.

The second reason I feel is that the Chinese laws are so strict that if a company fails to recover its dues from a foriegn company the penalties are very very high .

The Chinese Industry has seen boom in all sectors and they have invaded the word with some great products and seen phenomenal growth . With the world looking towards it as a manufacturing oasis with great economies of scale.The experience of the enterprenuers and people at the helm is much less as most of them are appointed by the government for thier life long work for the Communist Party.The last thing they want is to take a risk on their reputation.

Moreover most of the larger orders from overseas involve advances etc.and L/C does not offes flexibility in that regard.

In my experience T/T is not such a bad way for the buyers also as in a way it offers them security also , and as for me I have found The Chinese to be a trustwothy lot and am yet to face a problem because of T/Ts.

By the way Visiting China is a wonderfull experience and I must add the they are probably the most gracious hosts in the world , so donot let the T/T stop you, KAMPAI (cheers)!.

punkinsane

Replying to [sixer]:

China prefer TTs. There are bank charges whereby it amount
involved is unknown to many manufacturers when dealing direct.

Through China Exporters, then TT & LCs will be acceptable.
The bank charges and exporters profits have been built-in.

For small amount, TT will be the ideal business transaction
for China manufacturers. They do require capitals for turnover
and purchases of raw materials and operation.

China manufacturers have shy away from LCs due to some
bad experiences during early years when China manufacturers
are keen just to export without further LCs varification.