Doing Business With China!!

When I read the article in Business Line today, it saddened me quite a bit. China which has of late become the face of the BRIC nations is turning out to be a wolf in sheep skin. Doingbusiness.org ranks it 83 for "ease of doing business" and 88 for "protecting investors". So when I read that several Chinese banks including the Bank of China had refused to honor Letters of Credit which they had earlier guaranteed to traders from India, it correlated well with the dismal ranking that the country had been given by the World Bank.

Several Chinese banks refused to honour at least 15 LCs, each worth $3 million, amounting to $45 million and these include just the ones reported against. The question one needs to wonder about is whether China injecting $500 odd billion in its economy gives it the excuse to refuse payment on LCs and other obligations it had guaranteed. Should the relief package come at the cost of payments to other nations and how firm do laws of International Trade stand when a country just gives you a deaf ear? If a country's banks act like this, imagine what signals it sends to the companies in such a nation. You decide it yourself....