China question: How can I use letters of credit with Chinese suppliers?

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clpstaff &clp articles

I am a buyer and realise that most transactions with China suppliers are done through bank transfers, but I would like to know how to use letters of credit, as I have heard they can better protect me

The specialist perspective

A payment by letter of credit presents three major advantages. First, no deposit is required before production. Full payment happens only after shipment and under certain conditions. It is an excellent way of reducing risks for large orders.

Second, the buyer requires a list of documents. If the supplier does not send the right documents in the right number and by a certain date, it causes a discrepancy and suspends payment. It pushes the supplier to pay a lot of attention to documentation, so that the buyer can get the goods out of Customs smoothly.

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