Credit insurer Coface said payment default risk in China is still low but traders need to be cautious and selective with buyers up north.
The payment experience is generally good but one still needs to be cautious with China,'' Xavier Farcot, deputy general manager of Coface Hong Kong, said. The issue of commitment is still a problem. The corporate landscape in China is a concern, particularly its poor transparency on information. There is no central database on Chinese companies and no severe penalty for false disclosure to tax authorities. The lack of a proper legal framework on government information also poses a challenge. Protection of creditors' rights is also poor, with 60 per cent of court decisions never enforced.
