Chinese buyers are becoming more reluctant to agree to letter of credit (L/C) terms according to Euler Hermes.

The credit insurer says companies are now looking to obtain open account terms from their suppliers.

Research findings

In 2015, Euler Hermes Economic Research expects an increasing number of Chinese companies will face a lack of bank financing.

These companies are looking for alternatives, with a growing number choosing to delay payments to suppliers or asking for extended credit terms from their business partners.

Credit trends

"Essentially, Chinese buyers are increasingly turning to local exporters for more credit," explained Asia Pacific commercial director at Euler Hermes, Anil Berry.

"They are also insisting on open account terms whereas traditionally they were happy to pay on L/C or even on advance payment terms," he added.

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