A textile factory in Jiangsu province. China's exporters are facing soaring payment risks from the United States and Europe as a result of the global financial crisis, Sinosure's risk-analysis report revealed on Friday. [Asianewsphoto]
China's exporters are facing soaring payment risks from the United States and Europe as a result of the global financial crisis, Sinosure's risk-analysis report revealed on Friday.
As the country's only policy-oriented insurer specializing in export credit insurance, Sinosure has issued the global risk-analysis report since 2005. It covers 191 foreign countries and regions.
Due to the worsened global economy, 48 countries were downgraded in their risk ratings this year. But 14 countries, mainly in Africa and Latin America, saw an improved trade and investment environment and thus were upgraded in their ratings.
The United States, for the first time, was downgraded by one level. According to Sinosure's statistics, Chinese firms exporting textile, mechanical and electrical products to the US were the largest victims, with losses exceeding $10 million so far this year.
The situation in the EU is also poor. The claims Sinosure received on mechanical and electrical products were five times that of the same period last year.
"Comparatively speaking, Chinese exporters could do more in exploring business opportunities in Asia where risks rising from the global crisis are not so obvious yet," said Fu Ziying, vice-minister of commerce.
But according to the report, risks in Asia are also growing because of the weaker currency system and largely fluctuated pricing of commodities.
With $210 million having been paid to enterprises, Sinosure reported a 174.5 percent growth in claims in the previous 11 months this year, also indicating the soaring risks for Chinese exporters.
"Given the global financial turmoil, enterprises' demand for export credit insurance is also growing rapidly this year," said Liang Zhidong, vice-general manager of Sinosure.
The value insured by Sinosure jumped 64.5 percent year-on-year to 50.8 billion yuan at the end of October.
Due to the tightened cash flow, more overseas importers are now extending the period of payment, further exacerbating potential risks, Liang said.
Wang Yi, president of Sinosure, suggested Chinese exporters strengthen management of their accounts receivable to better fight against the growing trade risks,.
"A more careful and complete investigation on the buyers' credit is needed in such a global turmoil to prevent risks beforehand," said Wang.