One topic of great interest at a recent global banking conference was dealing with letters of credit in China. As those who use Chinese letters of credit know, the Chinese will reject a letter of credit on the minutest of discrepancies. Several participants now report that in certain instances the scrutiny has gotten even worse. One member related an instance where a letter of credit was rejected because it was signed in blue ink instead of black.

Several members theorized that the reason for the increased inspection is the cash flow problems in certain provinces. What can be done to overcome this problem of overly strict review and enforcement of documentary requirements?