In early July, Sinosure, China’s only officially-supported insurance company specializing in credit and investment insurance, issued operational data for H1 2009. From Jan to Jun 2009, the total short-term insured export credit was USD24.21 billion, with a growth of 31.5%.

At the end of May, the Chinese government formulated a series of measures to improve export credit insurance regulation. The measures included enhancing export credit insurance application coverage, arranging USD84 billion for export credit insurance, reducing premium written rates, etc.

Improving export credit insurance will help improve exporters’ competitiveness and company strength by supporting them to provide better payment terms, while the other export stimulation measures, such as raising export tax rebates or reducing costs for exporting, particularly emphasize reducing cost. Improving export credit insurance is recognized as a better measure to improve export advantage in the long-term.

One example is when the international photovoltaic industry turned from suppliers’ market to buyers’ market, the buyers required more favorable payment terms, such as payment settled in 90-180 days. Sinosure made adjustments accordingly, and from Jan to Jun 2009, Sinosure insured USD800 million for China’s photovoltaic industry, almost four times the number of 2008.

Because of the global financial crisis, some foreign companies affected by the devaluation of local currency provided better export prices than Chinese suppliers. Faced with strong competition from foreign enterprises, some Chinese companies are working with Sinosure to provide better payment terms and get orders without reducing prices. Export credit insurance also helps Chinese exporters solve financing problems.

(Source: China Insurance News)