Ann: Qianyun Placement and Offtake Agreements Update, page-258

Continuing on from my earlier post where I concluded with the benefit of doing business in Asia for more than 30 years, that QQ probably came up short because they could not raise the money. The red flags. Firstly find an excuse to delay, and then claim that banking regulations are getting in the way in order to delay further. Any local business person would recognise this as an old chestnut, and take none of it at face value seriously. They know the game which comes down to this;
1) they want out. They are well aware that they can walk away from any deal with a foreigner because the latter does not stand a chance in a Chinese court.
2) they want to secure a better deal. Let downs and time pressure are a time honoured tactic.
3) they don't have the money.

I would still maintain that they could not come up with the dough to honour any part of the deal. Playing ducks and drakes maybe, but forgoing a large paper profit and in a sellers market to boot seems a bit of a stretch. Still they may foolishly come back and offer $10,000 per ton, but I doubt it very much.

Asian business dealings have long been based on "cash on the knocker" partly to avoid the above. Unless you are dealing with big professional outfits like BYD who do business at international standards, a large sum of arm locking cash should be demanded up front. That is the Asian way of sorting out the genuine from the cowboys. Westerners seem to learn this only after being put through the mill. Terms which allow for small up front commitments and a lengthy  time for deliberation are often seen as an opportunity to exploit, not honour.  Foreigners who understand this, and effectively play the game accordingly are the only ones who get real respect. Swapping self big noting business cards counts for nothing in this game.

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