X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

Honeywell has a significant—and expanding—presence in China. But managing a treasury function there requires creative thinking. “China is a very unique market,” says Lawrence Chang, China treasury manager for Honeywell. “Its banking system is different from those of other countries. We have to understand the banks’ mind-set and find a mutually beneficial way to enlist their cooperation, while at the same time controlling risk.”

These were top-of-mind considerations when the global conglomerate looked at revamping its credit facilities in the country. Its Chinese businesses are cash-rich, but many require bank guaranties—such as warranty bonds, prepayment bonds, and performance bonds—as well as bank acceptance drafts, which are a standard method of payment within the Chinese auto industry. Historically, each of Honeywell’s four legal entities in China maintained a separate line of credit with a local bank branch to issue these agreements.

Maintaining four separate lines of credit was inefficient, Chang explains: “From an operations perspective, we had four individual entities going through the same process with four different Bank of China branches. They would each negotiate bank fees individually and then go through the same internal approval and legal review processes.” There was a lot of duplication of activities in this environment.

Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.

Your access to unlimited Treasury & Risk content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM websites including PropertyCasualty360.com and Law.com.

Already have an account?

Meg Waters

Meg Waters is the editor in chief of Treasury & Risk. She is the former editor in chief of BPM Magazine and the former managing editor of Business Finance.

More from this author

 

Treasury & Risk

Join Treasury & Risk

Don’t miss crucial treasury and finance news along with in-depth analysis and insights you need to make informed treasury decisions. Join Treasury & Risk now!

  • Free unlimited access to Treasury & Risk including case studies with corporate innovators, informative newsletters, educational webcasts, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM publications including PropertyCasualty360.com and Law.com.

Already have an account? Sign In Now
Join Treasury & Risk
Live Chat

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.