DC Insight

To reflect the growing financial importance of China in world markets, this issue of Insight contains articles by three Chinese writers, as well as a Focus on China by Daniel Laprès dealing with how financial institutions are regulated in the PRC. It's difficult to exaggerate the importance China has assumed on the world financial stage these last few years. As Laprès points out, the PRC now controls some 25 per cent of the world's total stock of international reserves, a staggering figure and one that has its impact on trade finance, particularly given the fact that letters of credit still figure prominently in Chinese trade transactions. Indeed, if the letter of credit's demise has been exaggerated, as our writers from SWIFT acknowledge in this issue, the continuing use of L/Cs by Chinese traders is one of the reasons.

One of our Chinese writers, Ray Sun (Sun Lei), contributes a thoughtful piece on the different meanings of "nominated bank" in UCP 600. Another, Wang Shanlun, argues that a date of issuance does not constitute a must for a bill of lading. Whether you agree or disagree with their points of view, it's clear that both have thought long and hard about the issues in UCP 600.

In keeping with our tradition of running features of current interest, our lead article examines the credit crunch and its impact on L/Cs. Its not-so-surprising conclusion: some banks, particularly in the US, are reluctant to issue L/Cs at all, while other banks (Deutsche Bank, for instance) are doing quite well with them, thank you.

Finally, we continue our coverage of the revision of ICC's Uniform Rules for Demand Guarantees (URDG). These important rules are undergoing a quiet revolution as the URDG Drafting Group digs deeper into the issues. To find out more, read Georges Affaki's interview in this issue.