is 178.18 billion yuan, accounting for nearly 40% of in the same period, a year-on-year increase of 10.5%, and a growth rate of 6 percentage points higher than the province... This is the "report card" of foreign trade import and export in the first eight months of 2022 released by Shunde recently.
Under the downward pressure of the economy, "going out" is a powerful tool to open up new worlds. Since the beginning of this year, Shunde's foreign trade has not only performed well in horizontal comparison, but also has a growth rate that has far exceeded other major economic indicators such as investment and industry above the designated size, becoming an important "escortist" for stabilizing growth.
Why is Shunde's foreign trade so stable? In addition to the inherent competitiveness of Shunde's manufacturing industry, there is a more low-key foreign trade stealth "escort" that has to be mentioned: export credit insurance . In 2021, the export volume of Shunde District under export credit insurance reached US$18.15 billion, accounting for 57% of the total export value, and the coverage rate ranks among the top in the province.
What kind of "magic" does export credit insurance have and how did it affect manufacturing in Shunde?
makes small and micro enterprises braver to "go global"
annual subsidy of US$150,000 for free insurance
"If there is no insurance, we may not dare to accept this order." said Shao Youjie, head of overseas business of Guangdong Gongxin Intelligent Conference Co., Ltd. (hereinafter referred to as "Kecreation Conference").
Shunde has focused on opening up global markets since its early years of " three to one supplement ", and has many foreign trade transformation and upgrading bases for many countries, and has long been among the top in the country in export share. In this process, export risks exist for all enterprises and are particularly important for small and medium-sized enterprises.
Credible Conference is a small and medium-sized enterprise specializing in conference system equipment . Its products are used in many international conferences such as G20 Summit, World Heritage Conference , etc. In October last year, the company shipped a shipment to a company called Sri Lankan , with a value of more than US$180,000. Before confirming the cooperation, the company visited the customer's place three times to ensure trade safety. However, due to the tight foreign exchange in the country, customers have not been able to pay in time according to the time agreed in the trade contract.
As an enterprise with an annual export volume of less than US$3 million, the Credible Conference has been through relevant policies of the foreign trade department in recent years and has obtained full premium funding of US$150,000 insured by small and micro export enterprises annually through relevant policies. After several proactive communications failed, the Public Credit Meeting informed China Credit Insurance Corporation Guangdong Branch of the risk of default and possible losses. The insurance company immediately launched the "Green Channel for Small and Micro Enterprises Claims", and finally completed the compensation within three weeks after the company submitted all the claims materials.
Leading enterprises need to guarantee
provincial, municipal and district finances have accumulated about 60% of the premiums supported by
For large and medium-sized enterprises with larger export volumes, export credit insurance also plays a role. However, unlike the annual guarantee of small and micro enterprises of a total of US$150,000, they adopt another method of protection.
Relevant person in charge of the Foreign Trade and Investment Promotion Section of the Economic Promotion Bureau of Shunde District introduced that for enterprises to insure short-term export trade credit insurance and export specific contracts credit insurance , the provincial, municipal and district finance departments will provide a total of about 60% of the premium fee support.
Guangdong Yizhimi Precision Machinery Co., Ltd. (hereinafter referred to as "Yizhimi") is the leader in the equipment industry in Shunde. Since 2009, Yizhimi has cooperated with export credit insurance companies to protect legitimate interests in the severe and complex environment of international trade, reasonably avoid the risks of foreign exchange collection, and accompany the growth of corporate foreign trade. Zhang Zengjie, the relevant person in charge of China Information Insurance Guangdong Branch, introduced that the insurance scale of Yizhimi in 2021 has increased by more than 40 times from 13 years ago.
In recent years, Yizhimi has continuously improved its internal risk control process and related systems. At the same time, combined with the risk warnings of CITIC Insurance Company and the risk reports shared regularly, the order amount reported in the past three years only accounts for 1% of the total sales amount. The person in charge of Izhimi's business still remembers that in January 2019, a Filipino customer owed nearly US$270,000 in total. After the company recovered the compensation on its own for a few months, it gradually recovered about $80,000.Although the buyer had the intention to repay, the capital flow was insufficient. So Yizhimi then entrusted compensation and claim from CITIC Insurance , and finally received a compensation of about US$160,000 in August of the same year, with the actual compensation ratio reaching 90%.
As a world-class leader in the plastic pipe industry, Liansu Group, headquartered in Shunde, has grown steadily in recent years, especially in North America, Southeast Asia and other places. Since 2012, Liansu has used export credit insurance. Currently, accounts receivable of overseas branches are fully included in Credit Insurance. As of August this year, Credit Insurance has underwritten the export business of nearly 17 overseas companies in Liansu.
What impressed Li Zhe, the overseas financial director of Liansu Group, was an Indian buyer. Last year, in mid-November, Liansu's overseas branch reported to the headquarters that the customer maliciously defaulted on the payment of goods and needed to file a case report and claim compensation from the export credit insurance company. However, the customer claimed product quality problems and asked Liansu for "loss fees" of 10 million rupees. To this end, the export insurance company inferred the time of in-hand documents, emails and lawyer letters from customers and found that the so-called quality problem is an excuse for towing money. Finally, through negotiations in the past six months, Liansu received compensation on July 1 this year.
Shunde District's export volume is protected by export credit insurance, accounting for 57%, ranking among the top in the province. The picture shows Shunde New Port. Photo by Dai Jiaxin
Expand the market, prevent risks, stabilize exports, and promote financing.
Export credit insurance coverage rate reaches 57%
"Export credit insurance has the unique policy function of "expanding the market, prevent risks, stabilize exports, and promote financing." The relevant person in charge of the Foreign Trade and Investment Promotion Section of the Economic Promotion Bureau of Shunde District introduced that export credit insurance allows enterprises to calmly deal with risks caused by war, riots, foreign exchange controls and other foreign government actions, as well as the buyer's commercial risks.
In addition, companies can also combine bank financing products and export credit insurance companies' policy products, and use accounts receivable under the policy as collateral to expand the bank's credit line to enterprises and help complete financing loans.
As early as 2016, the economic promotion department of Shunde District signed a cooperation agreement on the "Stable Foreign Trade and Promoting Development" credit insurance policy platform with the Guangdong Branch of China Export Credit Insurance Company. It pioneered the "Order Insurance" insurance plan in the country, protecting the market development of Shunde's backbone foreign trade enterprises and achieving good results. In 2020, Shunde continued to guide enterprises to insure export credit insurance through fiscal funds, and formulated the "Shunde District Growth Enterprises Insurance Fund Management Measures", providing premium support to growth enterprises in the district.
Last year, Shunde District provided full premium funding to small and micro enterprises with annual export volumes of less than US$3 million. In 2021, a total of 451 enterprises were supported, with a support amount of 1.36 million yuan. For enterprises to insure short-term export trade credit insurance and export specific contract credit insurance for "general enterprises", the provincial, municipal and district finance departments will support 303 enterprises in 2021, with a support amount of approximately 84.53 million yuan. The total export volume of Shunde District was US$18.15 billion, accounting for 57% of the total export value.
"We will continue to expand the scale and coverage of export credit insurance and support foreign trade enterprises to explore diversified international markets." said a relevant person in charge of the Foreign Trade Investment Promotion Section of the Economic Promotion Bureau of Shunde District.
[Southern Daily reporter] Xiong Cheng
[Author] Xiong Cheng
[Source] Nanfang Media Group Nanfang+Client
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