Insured exports likely to soar
By Zhang Fengming |
June 11, 2010, Friday
|
Print Edition
Print Edition
INSURED exports in Shanghai are expected to soar as much as 70 percent this year as China bids to boost the level of insurance coverage for overseas shipments, said the country's policy insurer yesterday.
The insurance, offered by China Export and Credit Insurance Corp, also known as Sinosure, is expected to provide cover of as much as US$10 billion this year, said Zhu Shouzhong, general manager of the Shanghai branch of Sinosure yesterday.
In the first four months of the year, exports rose an annual 27 percent to US$52.4 billion. In the first five months, insured exports took up 16 percent of Shanghai's total exports, up 3.8 percentage points from a year ago.
Shanghai's exports in 2009 were covered by insurance worth US$5.9 billion.
China is promoting export credit insurance to trim risk exposures faced by exporters. Although the financial crisis is waning, exporters still face concerns like the European debt crisis and rising trade disputes.
Export-oriented companies buy an export credit policy from the insurer to cover the risk of buyers defaulting on payments. If the buyer defaults, the insurer will compensate the exporters.
Shanghai will increase the insurance coverage, especially for small and medium-sized exporters and firms which sell advanced manufacturing equipment overseas, Sha Hailin, chairman of the Shanghai Commission of Commerce, said yesterday.
Sinosure set up an insurance policy especially for the city's small exporters whose annual trade is less than US$5 million. They can enjoy a lower premium charge at 0.2 percent of their annual trade while big exporters face an average 0.5 percent to 0.6 percent premium charge.
To further encourage the insurance scheme, Sinosure has signed policy financing agreements with banks, including the Bank of China, the Bank of Shanghai, Citibank, HSBC and Standard Chartered, in Shanghai.
The exporters can transfer the policy rights to the banks to get a loan.
The insurance, offered by China Export and Credit Insurance Corp, also known as Sinosure, is expected to provide cover of as much as US$10 billion this year, said Zhu Shouzhong, general manager of the Shanghai branch of Sinosure yesterday.
In the first four months of the year, exports rose an annual 27 percent to US$52.4 billion. In the first five months, insured exports took up 16 percent of Shanghai's total exports, up 3.8 percentage points from a year ago.
Shanghai's exports in 2009 were covered by insurance worth US$5.9 billion.
China is promoting export credit insurance to trim risk exposures faced by exporters. Although the financial crisis is waning, exporters still face concerns like the European debt crisis and rising trade disputes.
Export-oriented companies buy an export credit policy from the insurer to cover the risk of buyers defaulting on payments. If the buyer defaults, the insurer will compensate the exporters.
Shanghai will increase the insurance coverage, especially for small and medium-sized exporters and firms which sell advanced manufacturing equipment overseas, Sha Hailin, chairman of the Shanghai Commission of Commerce, said yesterday.
Sinosure set up an insurance policy especially for the city's small exporters whose annual trade is less than US$5 million. They can enjoy a lower premium charge at 0.2 percent of their annual trade while big exporters face an average 0.5 percent to 0.6 percent premium charge.
To further encourage the insurance scheme, Sinosure has signed policy financing agreements with banks, including the Bank of China, the Bank of Shanghai, Citibank, HSBC and Standard Chartered, in Shanghai.
The exporters can transfer the policy rights to the banks to get a loan.
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