1. China's exporting and importing role in the world economy has become a key factor in recent years. How would you describe China Exim’s role today?
China Eximbank is a state policy bank under the direct leadership of the State Council. At present, the Bank provides four main categories of financial services:
First, credit support for exports of high-value-added products, products of Chinese own brands and with Chinese self-reliant IPR, as well as imports of advanced technologies, equipment and resources, etc.;
Second, loans to support Chinese enterprises in their “going global” operations, including overseas investment and contracted projects;
Third, loans with preferential terms, including Chinese Government Concessional Loan and preferential export buyer’s credit; Fourth, onlending loans from foreign governments and organizations. By the end of 2007, the Bank’s total assets recorded RMB 524.2 billion yuan, making it one of the largest export credit agencies in the world.
2. The global balance of exports and imports has changed significantly over the last few years – and China's rise is at the centre of it. In light of this, what is the hardest aspect of your job and the biggest challenge ahead?
The Bank has been actively engaged in international economic cooperation to contribute to the building of a harmonious world. The Bank’s strategic priorities are as follows:
First, to support the development of China’s open economy. By adopting diversified financial instruments, the Bank assists Chinese enterprises in international competition and cooperation, and supports enterprises with comparative advantages to do business overseas. All these efforts have contributed to the continued development of the Chinese open economy, and promoted the common development and prosperity of China and the world at large.
Second, to support the building of an innovation-oriented country. The Chinese Government makes it a strategic target to build China into an innovation-oriented country by year 2020. To this end, the Bank will step up its support for collaboration in new- and high-tech sectors between Chinese and foreign enterprises, facilitate the export of high- and new-tech products and products with Chinese own IPR and brands, and finance the import of equipment and technology that are key to China’s economic growth.
Third, to support China’s economic restructuring. By financing export and import, the Bank strives to assist regional governments and enterprises in adjusting industrial structure, hence to facilitate coordinated development of the Chinese economy.
Fourth, to help other developing countries to achieve sustainable development. The Bank assists other developing countries in their infrastructure and public facility construction to consolidate their development foundation. The Bank also finances agricultural cooperation to improve the basic livelihood of people in other developing countries. By so doing, we are able to help developing countries to translate their resource advantages into development advantages, achieve sustainable growth of their economy and better life for the local people.
3. Is China Exim playing an active role in helping ease China’s trade surplus? What more can the Bank do in this regard?
To tackle the protruding issues of the Chinese economy such as international payment imbalance and huge trade surplus, the Bank has taken a series of measures:
First, to introduce import credit. From the first disbursement of import credit in 2006 to the end of year 2007, the Bank had supported an aggregate of USD 48 billion import.
Second, to finance exports to China by American SMEs to help ease China’s trade surplus against the US. At the end of 2006 and in May 2007, the Bank signed with US EXIM several cooperation agreements to support American SMEs in their exports of new- and high-tech products including environmental protection equipment and facilities to China. By March 2008, the outstanding of loans to finance Chinese imports from the US exceeded RMB 10.7 billion yuan.
Third, to innovate cooperation modes with other developing countries and stimulate their export growth. Take Africa as an example, we have worked with many African countries to help them step up resources exploration and exports to China. We collaborate in the agriculture sector, helping them to improve their subsistence capacity and reduce dependence on food imports. The Bank also assists countries with feasible conditions to develop their construction materials industry including cement plants, and promote trade among African countries.
In short, we have lent support for Africa to achieve its target of sustainable development and the Millennium Development Goals. Recent years have witnessed continued rise in the total volume of African exports. Between 2003 and 2006, the figure grew by over 20% on average annually, and its exports to China, in particular, had quadrupled over the past five years, giving a strong boost to the entire region.
4．China Eximbank has made much of its “social responsibilities”. Can you explain what these are and how they tie into your lending criteria?
As a financial institution in support of international economic cooperation, China Eximbank performs its social responsibilities by lending strong support for a well-balanced and green development of the economy. On the one hand, the Bank has already called off and withdrawn finance from pollution-suspected clients and projects domestically, and on the other, we strongly advocate sustainable development in international cooperation.
In 2007, we issued The Guidance for Environment and Social Evaluation on Loan Project and The Regulations on Loan Management and Operational Procedures for Energy Efficiency Financing Projects in Cooperation with the World Bank and other documents. By integrating the standards of energy saving and emission reduction into the credit granting system, the Bank has raised the threshold for loan application.
Besides, we have set up the mechanism of withdrawing loans from projects with environmental risks, and have turned down projects that do not meet environmental standards. In addition, we built a project post-evaluation mechanism with a view to assessing the economic and social impact of the projects we have financed, so that we can constantly make improvement and give full play to our strength.
In 2008, the Bank will make further improvement on “green credit”-related policies and regulations, and introduce into China advanced equipment and technologies for energy saving and emission reduction. In addition, we push ahead our financial cooperation with foreign counterparts in these areas.
5. China Exim has three representative offices in South Africa, Russia and France and relationships with 300 overseas banks [according to your website]; how does that reflect China's trading balance?; how do you choose those offices and bank relationships?; and do you have plans to expand them? Moreover, which countries/industries are particular targets for export growth?
With great focus on international exchanges and cooperation, the Bank has made strenuous efforts to build itself into a financial institution in line with international standards.
First, we are actively engaged in cooperation and exchanges with multilateral financial institutions. So far, we have set up extensive contact or regular consultation mechanism with many multilateral financial institutions including the World Bank, the Asian Development Bank, the African Development Bank, the West African Development Bank (Banque Ouest Africaine de Développement) and IIF. For example, we have started all-round cooperation with the World Bank on the onlending business for energy efficiency projects. Last May, we signed with the World Bank in Washington a MOU, initiating cooperation in promoting development, particularly the development of African countries.
Second, we are intent on building closer ties with international peers and collaborating with them in areas such as fund-raising, personnel training, information exchange and etc. Up till now, we have forged partnership and communication channels with export credit agencies of many countries, including the United States, Japan and Germany. In addition, as a member of the Asian ECA community, we were honored to host its 10th Annual Meeting in 2004.
Currently, we are discussing with relevant Japanese institutions on establishing an environment cooperation fund. Besides, we have maintained close ties with Citibank, Goldman Sachs, Daiwa Securities SMBC and other international financial institutions, and have ensured constant interaction with the state leaders, government agencies and entrepreneurs of a number of developing countries through frequent exchange of high-level visits. Moreover, we have set up correspondent banking relationship with nearly 600 branches of 450 foreign banks, which covers more than 100 countries and regions.
6. How important was your pioneering borrowing in RMB last year in Hong Kong? Do you plan other bond issues in Hong Kong or in other countries/currencies?
Almost all of the Bank’s working capital comes from the issuance of financial bonds in international and domestic markets. By the end of 2007, the Bank had accumulatively issued RMB 520.9 billion Renminbi bonds with a balance of RMB 222.5 billion, and USD 3.4 billion US dollar bonds with a balance of USD 3.2 billion.
In the years to come, bond issuance both at home and overseas will remain a major fund-raising channel for the Bank.