For instance, these companies usually use vehicles purchased as collateral to run their businesses. But laws and regulations concerning this practice vary greatly by province and municipality. Guangdong Provincial Vehicle Administration, for example, refuses to register vehicles used as collateral. Even the interpretations of the rules vary within a province, confusing foreigners. In addition, to avoid currency risks, auto-financing companies have traditionally accepted only the Chinese currency.
China still restricts foreign banks use of renminbi .
Li said that the short-term goal is to work out a strategic partnership with a major Chinese bank in developing the business. These Western companies think that Chinese laws on collateral need work. Business structures bear great risks, and procedures are tedious, especially in collecting used vehicles. Such invisible barriers are more insidious than the visible ones. Foreigners are even more concerned by the fact that China does not have a single reliable credit checking and recording system.