Banks reach accord on US exports

PUBLISHED : Wednesday, 23 May, 2007, 12:00am
UPDATED : Wednesday, 23 May, 2007, 12:00am

The mainland's export-import bank has reached a finance agreement with its American counterpart that will assist US exports to China.

Officials touted the deal as the first concrete results from the Strategic Economic Dialogue summit being held in Washington.

Export-Import Bank of China president Li Ruogu and Export-Import Bank of the United States president James Lambright signed a memorandum of understanding for a long-term credit agreement that will cover most US export deals worth more than US$20 million.

The first transaction to be considered will be the sale of US$164 million worth of heavy-duty railway maintenance equipment by Pennsylvania-based Harsco Corporation to the Ministry of Railways.

Officials from both sides hailed the accord as a boost for US jobs.

'This agreement will expand US exports, US employment and propel trade development with China,' Mr Li said at the signing ceremony held at the US bank's headquarters.

Mr Lambright said the agreements would 'establish a strong foundation for working together to support America's exporters and China's development'.

The banks also signed an agreement to expedite financial support for the sale of medical equipment from US exporters to hospitals mainland hospitals following negotiations at the first round of dialogue meetings in Beijing in December.

The financial accords came on the eve of the second round of dialogue talks, which began in Washington yesterday and will conclude today. The delegations are headed by US Treasury Secretary Henry Paulson and Vice-Premier Wu Yi . Ms Wu arrived with a delegation of 15 senior officials.

The summit comes at a time of increased congressional pressure on the Bush administration to take action on the growing US trade deficit with the mainland. It hit a record US$232.5 billion last year, US statistics show. Alan Holmer, the US Treasury Department's special envoy to China, who was also at the signing, called the arrangement 'the kind of win-win potential of increased economic co-operation'.

Mr Lambright added that the agreements, made at the behest of American firms, would create a 'template' that would speed financing options for exporters to the mainland. He said the US-government-backed bank already had US$2.5 billion of outstanding exposure or guarantees in the mainland market.