there is a chinese engineer lead has spend most of the morning working hours booking a private vacation trip (on the phone). and managers don't feel anything abnormal here. this is how chinese working ethics stands for, it's ok to taobao(ebay) /stock trading etc while working.
anyone think they have any chance to take over any demanding task ?
Regarding letters of credit, the buyer is basically giving you a good old fashioned I.O.U. and you are handing him over a very expensive item of technological equipment in exchange.
99% of the folks doing microchip production in China have government backing. So, if they decide they don't want to pay your letter of credit, you can forget ever collecting on it because the government there controls the legal system.
Most of the customers there try to get you to agree to CIF China consignment. That means they don't pay you till the goods get cleared by customs in China. At that stage, unless you have a Chinese subsidiary, they have complete control over the goods and can just take them without paying if they so wish.
A way to get round this is to open a company in China or Hong Kong.
Then, you can deliver the goods CIF China and the goods are still in your warehouse !
If adopting this strategy, it is important to do your best to make sure your warehouse security guard is not going to accept bribes......
Hi Stephen- thanks for weighing in. Nice to have the perspective of someone who actually sells fab equipment in China. What is the issue around letters of credit? Are you suspicious of those or you simply need to investigate them?