Studies On Development Of China’s Export Credit Insurance

With the establishment and continuous improvement of China’s socialist marketeconomic system, the finance and insurance industry is gradually becoming one of theimportant driving forces for China’s economic development. After2001formally joinedthe WTO, China’s economy continues to develop. And to comply with WTO agreements,Chinese government has continued to make adjustments in the finance and insuranceindustry. As an important symbol of measuring a country’s level of economicdevelopment, export trade has played an important role in the process of developing thenational economy and finance. In order to make sure the sustained, stable and healthydevelopment of China’s export trade, exporting goods and services need to improve itsown technical content, quality and performance. China also needs the special supportfrom the finance and insurance industry especially the export credit insurance.Export credit insurance is an insurance agreement. In the export process or relatedeconomic activity, export credit insurance institutions sign the agreement with the importenterprises which provide goods and services to foreign exporters. Export creditinsurance is essentially a kind of special policy measures. Export credit insuranceinstitutions get financial and economic support by the state to protect the legitimateinterests of national export enterprises when facing risks in the export trade, foreigninvestment and foreign project contracting and other economic activities. Byunderwriting commercial and political risks, export credit insurance achieves supportingfor commodity exports and foreign investment, reducing foreign exchange risks of exportenterprises, and protecting export enterprises’ exchange earnings security.In1989, China started the export credit insurance business. After more than20yearsdeveloping, export credit insurance make contributions to China’s export trade. But thedeveloped level still cannot keep up with the level in developed countries. It also can notfully meet the current export needs. So to speed up the development of China’s exportcredit insurance should be one of the most urgent tasks to support the implementation ofnational export policies to promote the development of export trade.This essay starts from a case. In the case of the United States Circuit Citybankruptcy, our export enterprises have business dealings with the Circuit City. This assay introduces how export credit insurance helps these enterprises reduce losses. Thenthrough the analysis of the case, comparing with the international experience of threedeveloped countries (United States, France and Japan), these assay sums up the existingproblems of China’s export credit insurance and propose solutions.