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

These were top-of-mind considerations when the globalconglomerate looked at revamping its credit facilities in thecountry. Its Chinese businesses are cash-rich, but many requirebank guaranties—such as warranty bonds, prepayment bonds, andperformance bonds—as well as bank acceptance drafts, which are astandard method of payment within the Chinese auto industry.Historically, each of Honeywell's four legal entities in Chinamaintained a separate line of credit with a local bank branch toissue these agreements.