Lawsuit Barrage Exposes Credit Swindling Secrets

By staff reporters Ma Jingying and Chenzhong Xiaolu

Since the early days of the Silk Road, importers and exporters in China have relied on structured trade finance via collateralized goods to bankroll deals.

It's a financing technique which, without proper supervision, can be easily abused. Indeed, several high-profile scams in China involved private business operators who swindled huge amounts of money by using bank letters of credit (LCs) obtained under the guise of foreign trade.