| China warns exporters against rising overseas credit risks |
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| Tuesday,January 06,2009 Posted: 07:08 BJT(2308 GMT) |
| From:Xinhua Article type:Redistributed |
Chinese exporters face an increased risk of not being paid for their goods as foreign banks run out of cash and some overseas importers evade paying debts, China's Ministry of Commerce (MOC) warned Monday.
"The cases of malicious debt evasion and breach of contracts by importers in certain countries or regions are on the rise," said the ministry in a notice. It attributed the phenomenon to the impact of the deepening global financial crisis.
The MOC urged local governments, guilds and overseas Chinese businesses to more closely monitor the credit of foreign importers.
Priority should be placed on tracking the credit ratings of foreign lenders, it said.
The ministry also called on local governments to support the development of export credit insurance and encourage exporters to carry such insurance by reducing premiums.
From January to November last year, China Export & Credit Insurance Corporation (SINOSURE) provided US$56.5 billion of guarantee for exporters against credit risks such as payment default. That is 63.6 percent higher than the same period a year earlier. The reason for the increase is that more exporters sought insurance, company figures show.
SINOSURE is China's only policy insurance company undertaking export credit insurance.
In that period, SINOSURE paid US$210 million of indemnities, up 174.5 percent from the same period of 2007.
In December, the insurer reduced credit ratings for a record 48 countries, including the United States. A total of 191 countries were reappraised in December.
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