A Reflection On China's Export Credit Insurance

Export Credit Insurance (ECI), as a program to guarantee payment to exporting firms who extend export credits, has been extensively used all over the world. Cash in advance and letters of credit are no longer competitive terms in the international marketplace. The increasing competition drives exporters to provide more favorable conditions to buyers.Trading on credit, on one hand, brings convenience to importers; on the other hand, it inevitably increases risks to exporters, who may not get paid. The occurrence of ECI just meets the needs to protect exporters' foreign receivables against non-payment risks.The operating systems of Export Credit Insurance in many countries, such as US, have been matured, and they do play crucial role in triggering the export. With ECI, firms are able to extend competitive credit terms to buyers, penetrate their target markets, and enhance their borrowing capacity.However, such an effective measure to trigger export has not been utilized in China until recent years. Even though its roles have been noticed by some people, its application in China now is far below the level expected by experts.In this thesis, at first, I introduce the theory supporting the application of ECI. Then I look into the ECI of US, and analyze the policies they adopt and the achievements they have got. From their experience, we may find some valuable operating patterns applicable in China. For example, the China Export Credit Insurance Corp (Sinosure), plan to expand its market to Latin America. In this field, ECI of US has accumulated successful experience, from which we may get benefits.