China unveils first credit insurance firm
( 2001-12-19 10:11) (1)
China's first specialized export credit insurance company was unveiled on Thursday in Beijing in a bid to stimulate the country's export growth.
China Export and Credit Insurance Corporation (Sinosure) -- a 4 billion yuan (US$482 million) policy-oriented company -- is the amalgamation of the existing export credit insurance businesses of the People's Insurance Company of China and the Export and Import Bank of China.
As a policy-oriented non-profit making company, Sinosure is designed to support China's government policies, especially in the aspect of exports, and assist the exports of as many enterprises as it can, as long as it does not create too much burden on the State's coffers, Sinosure Deputy General Manager Liang Zhidong said on Tuesday at the company's inauguration ceremony.
One major target of Sinosure, according to Liang, is to bring the export insurance coverage from its present 2 per cent to 10 to 15 per cent in the next 10 years, Liang said.
He added the company was structured with the help of foreign consultants in an effort to survive immediate competition following China's entry to the World Trade Organization.
"Although we are a State-owned policy company, we must operate in a commercial way and will try to break even in the long term," Liang said.
Zhou Keren, vice-foreign trade minister, said: "Such a company will play a significant role in stimulating China's export growth, especially when the world economic slowdown has cast a shadow on China's exports in a certain period."
Zhou said he hoped Sinosure will step up support to the export of goods, technology and services, especially high-technology and high-value-added machinery products.
Vice-Finance Minister Jin Liqun also noted at the ceremony that such a company was in accordance with the international practice and WTO stipulations.
China's export credit insurance emerged in the early 1980s, but insurance coverage remained low due to an ineffective operational mechanism and lack of market recognition, said Liang.
By the end of October, an accumulated US$18 billion of exports had been underwritten, equal to only 1 to 2 per cent of the total accumulated export volume, while in developed countries, the proportion usually stays at more than 10 per cent.
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