Zero Balance

How to get paid when exporting to China.
Magazine Contributor
1 min read

This story appears in the September 2007 issue of Entrepreneur. Subscribe »

For many exporters, the toughest part of doing business in China is being paid in full and on time. Here are four ways to battle the problem:

1. Know thy customer. Cultivate relationships with those familiar with the local market. Assess a customer's creditworthiness by collecting information such as direct and indirect company linkages. Develop a strong local business network that pulls from multiple information sources, such as consulates and chambers of commerce.

2. Consult with your banker to use a Letter of Credit. Or to deal in cash, use bank wire transfers--just be sure to require a down payment.

3. Have an arbitration clause in the sales contract and an Inspection Approval Certificate in your Letter of Credit so the supplier cannot ship goods prior to inspection.

4. Work with an experienced attorney or consultant to meet all requirements so you can get the money out of the country legally.

Begin your China research here or at the China Business Information Center.

Laurel Delaney runs GlobeTrade.com and LaurelDelaney.com, Chicago-based firms that specialize in international entrepreneurship.

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