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BIZCHINA> Top Biz News
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Chinese exporters face growing payment risks
By Hu Yuanyuan (China Daily)
Updated: 2008-11-27 13:38 China Export and Credit Insurance Company (Sinosure), the country's only insurer specializing in export credit insurance, reported a 174 percent growth in claims in the previous ten months this year, the company's top management said yesterday. The insurer has paid 150 million yuan to enterprises by the end of October, showing 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 manger of Sinosure. The value insured by Sinosure jumped 64.5 percent year-on-year to 50.8 billion yuan by October. Due to the tightened cash flow, more overseas importers are now extending the period of payment, thus further exacerbating potential risks, he added. According to the cnstock.com report, payments of more than 80 percent of Chinese exports are made after delivery. European and American importers usually make payments 90 days from the date of delivery, sometimes even 120 to 150 days, and Latin American importers as much as 360 days later, which may increase the risk of default in payments. Ministry of Commerce (MOFCOM) statistics show Chinese importers and exporters have registered more than $150 billion in overdue debts abroad so far, and the annual increment is estimated at $15 billion. (For more biz stories, please visit Industries)
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