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Bank-enterprise cooperation promoting ship exports
- Details
- Category: Ningbo Business
- Published: Tuesday, 23 April 2013 08:42
Recently, a 7,500-ton bulk carrier ship was built by a shipping company in Ningbo. Although it is not a significantly large order, the $7.5 million worth of order has a very special meaning. According to Liu Chunfa, President of the shipping company, this order is brought about by the "buyer credit finance scheme", which has been in operation since a decade ago. With the support of the bank credit, the company has successfully made exports within the shortest possible period.
According to reports, this is the first export buyer credit transaction in Ningbo involving the support from commercial banks.
It is said that the shipping company has been in business with the European buyer for years. At the end of 2010, the buyer made an order for buying more bulk carriers under the condition that "the shipping company can provide help in solving the financing problems". At the beginning of this year, with an insurance by China Export & Credit Insurance Corporation, a local bank entered the export buyer credit market by providing a loan of $5.25 million to the buyer and thus led to the completion of the transaction.
As is known, export buyer credit business is a means of providing long-term financing conveniences from the exporting countries in support of such capital goods or services as machinery and electronic products, complete sets of equipment and foreign project contracting, usually in such forms as insurance, guarantees, and interest rate subsidies. Since the beginning of the financial crisis, major European ship financing banks have raised their credit threshold. With the European debt crisis, the banks have further decreased the credit scale, which has posed more financing difficulties in local areas for European companies. To support domestic shipyards to receive overseas orders to maintain and increase exports, "export buyer credit mechanism" came into being.
"In the developed countries in America and Europe, export buyer credit accounts for over 95% of the export credit for machinery and electronic products. With a large market potential, the export buyer credit mechanism is sure to promote our economic transformation and upgrading, to improve the competitiveness of our products and to expand our overseas market shares." said Wang Hailong, Deputy-director of Ningbo Branch of the State Administration of Foreign Exchange.
