The Study Of Forfaiting

Nowadays the competition of the international trade is becoming more severe and the markets have become buyer-oriented. Very often, only extended payment terms can contribute more to winning a contract in the emerging markets of many countries. However, the complicated international-trade circumstance makes it very difficult to control the payment risks of export, and at the same time because of their own defects, the traditional trade finance products cannot satisfy the exporters' needs. Therefore, it has a high demand for the newer and better trade finance products and forfaiting is just a suitable one as a kind of bill discounted without recourse.To enter into WTO takes the opportunities and challenges to the Chinese banks, and the foreign banks will try to occupy the Chinese markets by their rich management experiences, high-quality services and various finance products. The international settlement service, as the main field being opened in the Chinese finance market, will be under the high pressure from the competition. Therefore, how to import and innovate the new international settlement products and enlarge the servicing field on the basis of the present settlement business has become very important for the Chinese banks to solve urgently. Forfaiting, the settlement product with the low risks and high profits has had almost forty-year history in the western countries. However, in China it is almost none. Hence, it is necessary to study and import forfaiting in order to face the foreign banks' challenges and serve the Chinese exports better. The main aim of this paper is at supplying some possible information for the Chinese banks and enterprises to refer to when they develop forfaiting.This dissertation begins with the outline of forfaiting and then goes to the operation of it. In the third chapter two cases related with forfaiting are analyzed to try to make the readers have the further understanding of forfaiting. In the end of this paper it studies the forfaiting in China.