Hong Kong export credit insurer sees claims drop to 10-year low as it benefits from steady overseas business environment

Governments have learned from past mistakes and have offered more help to SMEs during the pandemic, says new ECIC chief

Outlook looks cloudy as some governments have started to withdraw subsidies

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An aerial view of Kwai Chung Container Terminal in Hong Kong. Exporters from the city have seen fewer delayed payments from overseas buyers this year. Photo: Winson Wong

Published: 7:00am, 10 Sep 2021

The Hong Kong government-owned Export Credit Insurance Corporation (ECIC) saw claims fall to a 10-year low in the first seven months of this year, as fewer than expected overseas buyers went bankrupt, according to its newly appointed head.

The adoption of monetary easing policies by many governments worldwide and introduction of subsidy programmes since last year to help companies cope with the economic downturn caused by the Covid-19 pandemic proved beneficial for ECIC, said Terence Chiu, who took over as commissioner in July.

The ECIC sells credit insurance to Hong Kong exporters to cover losses in case their buyers delay payment or go bankrupt. The amount involved in distressed cases in the year to July was around 10 per cent of the average for the same period in the past 10 years, while the number of cases was about one-third that over the same 10-year period, Chiu said.

The ECIC, however, did not provide a figure for the claim amount or the number of cases.

(From left) Hong Kong Export Credit Insurance Corporation commissioner Terence Chiu and chairman Dennis Ng at a media briefing on Thursday. Photo: Enoch Yiu

“When the Covid-19 pandemic hit many industries last year, we did worry about a massive number of buyers going bankrupt just as it happened during the 2009 financial crisis,” Chiu said on Thursday. “But in reality, we did not see many bankruptcies as Hong Kong and other international governments have introduced a lot of programmes to help support SMEs [small and medium-sized enterprises] to cope with the tough times.”

Chiu, who joined ECIC after retiring from HSBC where he worked for over three decades, said there were more corporate collapses and buyers unable to pay their bills during the economic crises of 1998 and 2009.