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| Sinosure to Insure Global Exports |
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Large package equipment exporters will likely get increased support from China Export & Credit Insurance Company (Sinosure), "Our support will not only go to big State-owned enterprises but also small and medium-sized enterprises (SMEs)," Tang Ruoxin, president of Sinosure, said in an interview with China Daily. "And our guarantee will make it much easier for SMEs to get loans from banks, quenching their thirst for capital." Sinosure signed a number of deals with industry bellwethers last year, such as China National Electronics Import and Export Corporation (CEIEC) and Changhong Electric Appliance Co, providing a package of insurance services to aid exports in the global market. "Backed up by Sinosure, we are more confident in shifting our focus from the overly competitive low-end market to overseas engineering contacts and package equipment exports," said Cong Yadong, CEIEC's president. "These lucrative areas come along with higher risks, and that's why we joined hands with Sinosure." Meanwhile, as another focus this year, Sinosure plans to strengthen its cooperation with its foreign counterparts. "We need their help to better serve our customers in tapping overseas market. Meanwhile, our foreign counterparts also want our data and network when their customers do business in For instance, the company partnered up with Export Development Canada (EDC) last November, to strengthen cooperation in export credit services for Chinese and Canadian enterprises. As more foreign credit insurance firms rush into But Zhou Ji'an, assistant president of Sinosure, does not think those foreign player will be a big threat to the company. "Usually, short-term export credit insurance (with insurance period within 180 days) in OECD (Organization for Economic Cooperation and Development) countries are profitable as the legal system and market there are more sound," Zhou said. "However, for the Chinese market, the potential risks are much higher than the world's average. Therefore, no smart players will venture into such a market." Zhou is most frustrated that Chinese enterprises don't know how to take advantage of export credit insurance. "Many of them went to two extremes: braving the risks or giving up on opportunities. Quite a number of them have no idea of hedging risks through Sinosure." In fact, export credit insurance is playing an increasingly important role in heightening Chinese exports and fuelling Last year, Sinosure provided insured amount totaling US$21.2 billion in "This figure accounts for 6.4 percent of Since its establishment in 2002, the company's business scale maintained an average growth of 101 percent every year, exceeding US$43 billion by the end of last year. "Export credit insurance has been an essential tool in expanding Meanwhile, The total amount of As economic globalization widens, further restrictions are placed on government subsidies and other policies supporting exporters, meaning export credit insurance, a widely accepted indirect means of support, is attracting more attention as a way to promote trade and investment. According to Tang, the functions of export credit insurance are mainly demonstrated in three ways: Providing exporters with payment security and more flexible means of settlements, thus making firms more internationally competitive Helping enterprises build an improved risk prevention mechanism and improving management of debt collection Providing enterprises with convenience in trade and project financing and helping exporters solve working capital shortage problems. (
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