What is happening to the L/C – Rich Kuslan

Rich Kuslan

Where is the Letter of Credit (L/C), wonders Rich Kuslan at his weblog Asiabizblog. The freeze at the interbanking lending might bring trade with China to a standstill.

Companies completely dependent upon product purchased overseas by means of letters of credit could be badly affected if L/Cs will not issue. Very few will purchase product from China T/T and who will ship D/P? Primarily self financed manufactured goods (not many of those, one expects) and domestic manufacturers may be somewhat better off.

Before him also Paul Denlinger and William Bao Bean pointed at this danger of bringing down China’s export to a trickle. Even when the export markets remain in place, that would not help much unless also the financial instruments connected with it will keep on functioning. There are some indirect signals all is not well, but very little from the trade industry itself.

Commercial
Not surprisingly, Rich Kuslan, William Bao Bean and Paul Denlinger are pushing the China-debate, All three are represented by the China Speakers Bureau. Do let us know when you need an excellent speaker at your event.
Paul Denlinger
by Fons1 via Flickr