unclechina.org

As discussed earlier in this blog Shanghai Scrap has done an excellent job of covering a news story involving an allegedly kidnapped British businessman.  For those of you who are not regularly reading Shanghai Scrap there is an update on this story here. 

From a business point of view it comes as quite a surprise to me that scrap exporters would be selling to Chinese importers on the basis of a 10% down contract.  While trust may have been built up over a period of months or years these terms are foolish and have obviously been taken advantage of by many of China’s scrap importers who are currently breaking contracts as the price of scrap falls.  Importers that contracted for barges full of scrap have been finding a number of ways to get out of contracts while the shipments are still on the high seas bound for China or accumulating demurrage charges in China’s ports.  The lesson for all is - don’t trust anybody in business - especially in countries with weak legal systems and a close connection between business and government (eg: China).