Australian treasurers and CFOs say Chinese counterparts are requesting more LCs are part of their trade negotiations. The LCs are allowing the Chinese firms to line up better financing rates offshore.
Global trade flow volumes have declined in 2012, dwindling to $37.7 billion and registering 217 deals in the year. This is down from $40.5 billion and 593 deals recorded in 2011.
BHP Billiton has executed the first fully electronic document presentation under a letter of credit into China, but critics remain skeptical over the chances of wider adoption.