Bank of China

Guangdong gets export loan lift

PUBLISHED : Saturday, 03 October, 1998, 12:00am
UPDATED : Saturday, 03 October, 1998, 12:00am

The Bank of China (BOC) has promised more loans for Guangdong exporters whose trade volume accounts for more than 40 per cent of the national total.

BOC's Guangdong branch lent 35 billion yuan (about HK$32.5 billion) to trade firms by the end of August, with the bulk going to foreign-funded enterprises, Xinhua news agency reported, quoting a bank official.

The official said the mainland's exporters were faced with unprecedented difficulties due to the deepening financial crisis in Asia.

As exports by foreign-invested enterprises already surpassed those of domestic firms, BOC increased lending to those firms to 32 billion yuan by the end of August.

To lift exports, the bank provided low-interest loans to Guangdong exporters in the silk, machinery, foodstuffs, textiles, and animal husbandry industries.

For those loss-making exporters, the bank provided 'sealed loans' which could be used only in production of commodities meant for export. The aim is to prevent firms from diverting funds for other purposes.

Mainland exports have fallen sharply this year due to currency devaluations which have dampened demand from Asia.

Exports rose 5.5 per cent year on year in the first eight months, compared with a growth rate of more than 20 per cent last year.

In Guangdong, exports rose 8.1 per cent in the first eight months, short of its 10 per cent target for this year.

The provincial authorities have announced measures to boost exports.

They include reducing fees and easing bureaucratic controls on foreign-invested companies and full corporate profit-tax rebates to state companies that expand exports by more than 15 per cent this calendar year.