Exim Bank shows key support skills in wake of crisis
The Export-Import Bank of China (Exim Bank) has proven surprisingly successful at supporting the mainland's export drive during the difficult years since the Asian financial crisis.
The bank, established six years ago, helped to maintain mainland competitiveness when neighbouring countries and competitors devalued their currencies in 1997-98.
Earlier this year bank president Yang Zilin, said the bank had lent 43.5 billion yuan (about HK$40.7 billion) to finance exports of machinery and equipment to help domestic enterprises win overseas project contracts.
With the help of Exim Bank lending, manufacturers have exported 480 ships, 53 generating sets and 76 aircraft to more than 40 countries in Asia, Europe, Africa and Latin America, and mainland companies have participated in 25 large projects overseas. In the first six months of this year, Exim Bank approved 12.8 billion yuan of export seller's loans, double the amount covered last year, as well as US$111 million of export buyer's loans.
The bank also provided 12 export-credit insurance letters worth about US$1 billion to help mainland exporters.
'We are going to help enterprises execute their export strategies and boost exports to Asian countries, where the economies are recovering,' Mr Yang said recently.
The Exim Bank has a 30 billion yuan line for export seller's credits for the whole of this year, a 12 per cent increase on last year.
Last month, the bank raised more credit by issuing domestic bonds worth five billion yuan.
The Financial News reported recently how the bank had been particularly helpful in supporting the exports of companies in the western provinces.
Gansu construction companies are active in Togo, Cameroon, Zaire and Libya.
In Mali, mainland firms have become involved in about 70 projects, including sugar cane, textiles and pharmaceuticals and in building a trade centre and a sports stadium.
Since October, the bank has become involved in helping the mainland break through into the higher technology end of the market.
Machinery and electronic exports have increased by more than 40 per cent in the past six months and Exim Bank-backed exports were worth US$6.4 billion in the first half of the year.
It financed the first large sale of telecommunications products by lending US$250 million to a domestic telecom-maker for an export contract with a Pakistani buyer.
In the spring, Exim Bank announced a 1.26 billion yuan credit, its biggest finance package for a single hi-tech deal, the export of telecommunications equipment to Bangladesh, where China Machinery and Equipment Import and Export is installing telephone exchanges in 58 rural districts.
The Exim Bank is also now lending heavily to finance exports of aviation products built under contract to Boeing and other giants to help the mainland's struggling civil aviation industry.
In the latest deal, the bank has become involved promoting struggling shipbuilding industries.
It is backing a deal whereby mainland shipyards will make and repair Russian ships for Russian ship-builder Sudoimport using Russian-made components.
Since 1998, Exim Bank has been granting loans to construction firms to help them win construction project contracts in key regions such as the Middle East, previously dominated by Western firms.
By the end of last year, it had lent 2.5 billion yuan to finance projects worth US$1.2 billion in 15 countries. Consequently, the bank has begun sending special inspection teams to assess the risks of borrower countries such as Iran and Bangladesh before approving loans.
