China Export & Credit Insurance Corp (Sinosure) Thursday signed a landmark deal with Standard Chartered Bank (SCB) to jointly offer Chinese exporters credit insurance coverage and trade financing services.

The deal is the first that the government-funded export credit agency has concluded with a foreign banking firm to provide export credit insurance services to Chinese exporters.

Prior to the move, the insurance firm had already signed deals with 23 domestic banks in the trading finance arena to extend insurance and finance services for more than 300 Chinese exporters.

According to the deal, Sinosure and Standard Chartered will co-operate in a number of areas, including client exchanges, product development and information sharing.

Being the country's only policy oriented export credit insurance institution, Sinosure will work with Standard Chartered to learn from its international experience and introduce new products catering to the specific requirements of its clients in China.

"We are very committed to introducing innovative products and solutions to benefit of our clients... We believe that jointly we are better able to meet the financial needs of local exporters," said Lim Cheng Teck, head of SCB's corporate and institutional banking in China.

SCB also launched its account receivables finance services to local companies. It will provide qualifying local exporters working capital financing through international account receivables financing, with credit insurance coverage provided by Sinosure.

"In addition to providing the traditional trade finance services, we will continue to focus on product innovation. We believe that this international account receivables financing will benefit working capital management of local exporters," said Lim.

Earlier this month, Sinosure also signed deals with a banking consortium consisting of French bank SG Group and the Industrial and Commercial Bank of China to offer buyer credit transaction insurance services, which is also the first buyer credit transaction that Sinosure has completed with a foreign bank.

Under the agreement, the consortium will provide ZTE Telecom, one of China's largest telecom equipment suppliers, with trading buyer credit services for its CDMA equipment export to Algeria.

"Successful co-operation with foreign banks not only helps Chinese exporters ward off risks in exports, but also give us a clear signal that foreign banks have accepted the credit of Chinese insurers," said Liang Zhidong, Sinosure deputy general manager.

Statistics indicated that China's exports hit US$450 billion in 2003, a huge increase from US$300 billion in 2002. But less that 3 per cent of these exports have been sheltered by export finance services provided by Sinosure, China's only government-funded export credit agency.

"As a global leader in export finance, it has been a strategic priority for SG to be a leader among the international banks in the Chinese export finance market," said Patrick Soulard, deputy chief executive of SG's Corporate and Investment Bank.

Liang said that his firm has already established contacts with most foreign banks doing business in China, and more deals will be signed in the near future to better protect Chinese firms' exports.

(China Daily April 9, 2004)