How China’s Commodity-Financing Bubble Becomes Globally Contagious
From the article:
Chinese buyers may default on a further 1.2 million metric tons (1.32 million tons) of soybeans worth about $900 million being shipped from the United States and South America, to avoid incurring huge losses in a depressed local market, the country’s top soy buyer said.
So,…..the “exporter’s” (anyone China is doing business with) are left holding the bag if China defaults (doesn’t pay). This isn’t exactly “chump change” (a trivial amount of money).
Also from the article:
“Most of the cargoes were delivered by the seller before receiving letters-of-credit and buyers are unwilling to pay now because they will suffer massive losses,” said Shao, speaking from a hotel suite he uses when in Rizhao in this eastern province.
“If buyers cannot resolve the issue, they may also cancel future shipments.”