Chapter Ten Trade Promotion and Supporting Services
1.Export Credit Insurance 1.1 Brief Introduction 1.2 The Hong Kong Export Credit Insurance Corporation 1.3 China Export Credit Insurance Corporation
1.1 Brief Introduction A. Meaning Export credit insurance provides exporters with insurance against buyers' credit risk and country risk. Specifically, it provides an additional security to banks on behalf of the exporters so that the bank is more willing to lend money to the exporter.
B.Underwriting risks Commercial risks----Buyer risks • Bankruptcy or inability to pay • Default payment • Repudiation of goods
B.Underwriting risks Political risks----Country risks •Restrictions or prohibitions of foreign exchange payment • Restrictions or prohibitions on import transactions • Cancellation of an import license • Protracted payment by government • War,revolution or similar events
To help exporters adopt flexible payment terms and expand export To provide finance facilities To manage account receivables and set up risk management mechanism To make compensation and guarantee the stability of business operations C.Major Functions of Export Credit Insurance
1.2 The Hong Kong Export Credit Insurance Corporation • Roles of the ECIC and the Range of Services Provided The role of the Corporation is to encourage and support export trade through the provision of professional and customer-oriented services. • Advantages of Having ECIC Cover
A. Introduction • Founded on December 18, 2001 • Only Officially supported Export Credit Insurance Agency in China,like US EXIM Bank, but not provide loan • Wholly Owned by the Chinese Government (Ministry of Finance)
B.Characteristics • Market-oriented, • State-sponsored, Promoting Chinese Export and Investment • Government Support:Central and local governments set up export credit insurance supporting and development funds
C.Mission Approved by the State Council, Sinosure’s mission: To support goods ,technology and service export, especially the high-tech and value-added machinery and electronic products export
D.Nationwide Network 20 branches and sub-branches around the country
E.Overseas Network • Representative office in the U.K. • Member of International Union of Credit and Investment Insurers • Close cooperation with other Export Credit Agencies,including Euler-Hermes,Coface,US EXIM Bank • 28 credit rating channels worldwide
F.Coverage Over 180 countries and regions
2.The Trade and Industry Department • (a)To play a key role in international trade for the pursuit of global free trade; • (b)To assist the trade and industry in safeguarding and maximising their access to the global market; • (c)To help Hong Kong enterprises including small and medium enterprises (SMEs) enhance their competitiveness and add value to their products and services; • (d)To safeguard the integrity and credibility of Hong Kong’s trade regime; and • (e)To further develop staff skills, support structures and systems to enable the Department to meet new challenges.
3.Hong Kong Trade Development Council(HKTDC) • (a)creating and delivering value to our customers; • (b)building on Hong Kong's economic success through global business; • (c)maintaining trust, respect and openness in all our relationships.
4.Federation of Hong Kong Industries • Objectives of the Federation are to promote and foster the interests of Hong Kong’s industrial and business sectors. It promotes trade, investment, technological advancement, manpower development and business opportunities in Hong Kong and represents industry’s views and influences Government on policies and legislation which affect industry and business.
5.The Chinese General Chamber of Commerce • (a)To promote trade and industry and enhance the prosperity of Hong Kong; • (b)To protect the right and interests of the business and industrial community in Hong Kong; • (c)To participate in public affairs and reflect the views of the business and industrial community; • (d)To develop international and regional communication with a view to promoting economic co-operation.