By Jiang Fan

According to statistics from China's General Administration of Customs, China's export in the first two months of this year amounted to US$533.03 billion, trade deficit totaling at US$4.25 billion. Among which, trade deficit in February alone reached US$31.49 billion, creating the record of the highest monthly deficit in near a decade. Chen Deming, minister of the Ministry of Commerce, said during the annual sessions of NPC and CPPCC this year that the target of 10 percent of growth in foreign trade could be achieved, but, as he stressed "only through arduous and hard work".

Support to foreign trade is imperative

Compared to the underwriting volume of the US$84 billion of export credit insurance determined by the Chinese government in 2009, the underwriting volume in 2012 will be significantly bigger than this number.

It is learned that China is planning to introduce new foreign trade support policies in order to stabilize export. Stabilizing the export tax rebate policy and increasing trade financing and credit insurance are mentioned in the Government Work Report this year.

Ma Yu, a researcher of the research institute of the Ministry of Commerce, believes that foreign trade support policy will focus on enterprises' financing difficulty and tax reduction and exemption. Tariff in import and export is rather complicated. It would be difficult to adjust for the time being, and even if it is adjusted, the extent and range would not be very big. Therefore, credit insurance may become the main content in the foreign trade support policy this time.

As a matter of fact, as early as May 2009, in a bid to reverse the sharp slipping trend of China's export trade, the State Council promulgated 6 policy measures to stabilize foreign demands, export credit insurance policy being the top measure. In almost 3 years since the implementation of this policy, it has been highly acclaimed by local governments and foreign trade enterprises alike. According to professionals, the volume of export credit insurance has been expanding since 2009. Therefore, Compared to the underwriting volume of the US$84 billion of export credit insurance determined by the Chinese government in 2009, the underwriting volume in 2012 will be significantly bigger than this number. 

Credit insurance hedges risks

In coping with intensified trade frictions, China Export & Credit Insurance Corporation plays a positive role in helping Chinese enterprises avoid risks

In recent years, governments all over the world have been attaching more importance to the role of credit insurance in boosting export, promoting investment, and controlling risks. Especially after 2009, governments in a lot of countries have continued to increase support to policy-related Export Credit Agencies. For examples, Germany has significantly increased the financial budget of export credit insurance; the Japanese government has added US$16 billion in export trade insurance responsibility, so as to increase insurance on Japan's exporters.

China's export credit insurance has been developing rapidly. In 2011, the underwriting amount of export credit insurance reached US$216.24 billion, accounting for 23.6 percent of China's general export amount in the same period, and 11.4 percent of the total export amount in the same period, much higher than international average. The underwriting volume of medium- to long-term export credit insurance reached US$10.76 billion, an increase of 11.6 percent.

During the process, the business volume and operation capability of China Export & Credit Insurance Corporation (SINOSURE), the only policy-related export credit insurance agency in China, have also been increasing. In coping with intensified trade frictions, SINOSURE plays a positive role in helping Chinese enterprises avoid risks. For example, in 2011, SINOSURE launched a green access to settlement of claims in a timely manner, providing compensation to 31 enterprises who have suffered losses in the Libya war, China Gezhouba Corporation and CNBM receiving RMB162 million Yuan and RMB48.15 million Yuan respectively, greatly guaranteeing the stability of their operation.

Increasing momentum in pushing reform

SINOSURE also increases guarantee efforts for enterprises exporting to emerging markets, helps enterprises optimize distribution in international markets, and increases efforts to explore markets in developing countries

Besides helping enterprises to avoid risks, export credit insurance has also played an important policy-guiding role in accelerating the transformation of China's foreign trade and export. 

In 2011, in order to comply with the overall requirements of the structural adjustment of China's foreign trade industry, SINOSURE increased support to the export of China's key industries in its underwriting, providing support worth of US$172.99 billion to 8 major industries including electromechanical products, whole-vehicle and auto parts, vessels, new and high technology, textiles, light industrial products, agricultural products, and pharmaceutical products, accounting for 80 percent of total export credit insurance. Since 2009, SINOSURE has also provided specialized insurance support to vessel, automobile, and whole-set equipment.   

It is learned that content about support to the 421 whole-set equipment specialized plan in the foreign trade support policy that is about to be promulgated attracts quite some attention. The so-called "421" specialized project refers to the arrangement of the specialized fund of large-scale whole-set equipment export financing insurance. Enterprises that are qualified for this project can enjoy numerous preferences including accelerated loan approval process and divided payment of insurance fee. 

Large-scale whole-set equipment and engineering projects cover numerous industrial chains and technology-intensive industries including electric power, telecommunication, metallurgy, petrochemical, and rail transportation. It is considered an important carrier in the structural adjustment of China's foreign trade. Besides, most of these enterprises have sufficient orders in their hands. Of the export projects that have received support from the "421" specialized project, communication equipment and electric power equipment each accounts for a half.

According to statistics, the effects of the support of "421" specialized project has been apparent. As of October 2011, SINOSURE had received an aggregate of 116 specialized projects approved by the State Council, involving US$37.65 billion worth of contracts; it had completed 201 underwriting solutions, covering 50 destination countries and regions and providing key support to the export of many projects that are of high Chinese component, high technology content, and high added value, effectively improving the international competitiveness of "made in China".

Besides, in last year, China's trade growth in conventional markets in America and Europe decelerated, but in emerging markets such as Brazil, Russia, and Australia, trade growth rose against the trend. In the past 2 years, SINOSURE has also increased guarantee efforts for enterprises exporting to emerging markets, helped enterprises to optimize distribution in international markets, and increased effort to explore markets in developing countries in the meantime of consolidating the conventional market and cultivating periphery markets.