Find out more about the opportunities and challenges of exporting to China

With the Euler Hermes Country Report

You can read the full report below, but we’ve provided a summary here to give you some insight into what you can expect.

Collecting in China

As a result of a re-balancing policy in China where the focus is moving from investment to consumption, direct financing or bank loans are shrinking sharply. As a result, days sales outstanding (DSO), remains high and late payments are not efficiently regulated.

The court system is complex and suffers from a lack of transparency, delays and high costs. As enforcement results are poor, amicable or non-litigation collection is the preferred option.

The insolvency framework is also complex, with liquidation as the default procedure.

Availability of financial information

As a general rule, publicly available financial information on Chinese companies is not satisfactory. Due to a lack of transparency, data rarely reflects actual business situations. Only listed companies have the obligation to disclose their financial statements. For the rest, the information is either not available or not reliable. In addition, there are no restrictions on business owners starting new businesses after shutting down another without settling debts.


The most common payment methods are as follows:

Swift bank transfers are among the most popular payment means as they are fast, secured, and supported by an increasingly developed banking network internationally and domestically. In the case of companies located outside of China and exporting into China, transfers are usually guaranteed through an Export Credit Insurance policy, which helps minimise the risk of sudden or unexpected customer insolvency.

Credit insurance for domestic trade within China is growing and increasing in popularity among Chinese corporates. Standby Letters of Credit (a bank guarantees the debtor’s credit quality and repayment abilities) constitute reliable guarantees which can be interpreted as a sign of good faith since they can be triggered as a ‘payment of last resort’, if the client fails to fulfil a contractual commitment.

Also, irrevocable and confirmed Documentary Letters of Credit (a debtor guarantees that a certain amount of money is made available to a beneficiary through a bank once certain terms specifically agreed by the parties have been met) may be considered.

Read the full report to better understand the nature of collecting payments in China. Our export finance experts are happy to help make exporting easier, discuss your ideas and offer finance solutions tailored to your company needs.

Download the China Country Report here

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