Chinese Port? Hong Kong, Macao, or Kaohsiung?

Intro

Letters of credit sometimes use broad geographical terms like “any Chinese port.” That sounds simple, but in practice it raises tricky questions—especially when ports like Hong Kong, Macao, or Kaohsiung are involved. ICC has clarified part of this, but not everything. Here’s how to understand it from an LC practice perspective.

QUESTION

Dear Mr. Old Man,

As far as I remember, one of your posts confirmed that a bill of lading indicating the port of discharge as Hong Kong complies with an LC requiring the port of discharge as “any Chinese port.”

How about Macao?

How about Kaohsiung in Taiwan?

Looking forward to hearing your comment.

Thank you.

Best regards,

P.

_________

ANSWER

Hong Kong was a British colony until it was returned to China in 1997. It is now a Special Administrative Region (SAR) of China under the “one country, two systems” model, with its Chief Executive appointed by the Chinese Government.

In view of the above, Hong Kong is considered a Chinese port. If the LC states port of discharge as any Chinese port, then a bill of lading showing Hong Kong as the port of discharge is acceptable.

My view is based on ICC Opinions R799 and TA.770rev2, which confirm that “any Chinese port” is understood to include Hong Kong. This interpretation is also consistent with ISBP 821, sub-articles E6(g) and E10, which provide that when a credit indicates a geographical area or range of ports, the bill of lading must indicate an actual port within that area.

ICC also notes that customs and port operations in Hong Kong and Mainland China are different. Therefore, if the applicant and beneficiary intend shipment from or to a Mainland Chinese port only, the LC should specify that explicitly. Otherwise, banks must accept documents showing shipment from or to Hong Kong.

And what about Macao?

Macao was a Portuguese colony until it was returned to China in 1999. Like Hong Kong, it is a Special Administrative Region of China under the “one country, two systems” model.

Therefore, by analogy, if the LC stipulates shipment from or to any Chinese port, a bill of lading showing Macao as port of loading or discharge would also be acceptable.

And how about Kaohsiung?

The answer is No.

Kaohsiung is in Taiwan, whose official name is the Republic of China (ROC), while China is the People’s Republic of China (PRC). Despite the “One China” policy, Taiwan operates as a separate political, economic, and trade entity from Mainland China.

Therefore, if the LC stipulates shipment from or to any Chinese port, a bill of lading showing Kaohsiung, Taiwan would not comply.

If the issuing bank intends shipment from or to Taiwan, the LC should clearly state the specific port in Taiwan (e.g., Kaohsiung) or, more generally, any port of Taiwan.

Best regards,

Mr. Old Man