AmCham Shanghai hosted a roundtable with Chairman and President of the Export-Import Bank of the United States Fred Hochberg, and a delegation of senior staff, on August 10. Hochberg discussed the initiatives of the Bank and its activities in China.
The Export-Import Bank of the United States (EXIM) is the official export credit agency of the United States. The EXIM Bank, like its international counterparts, guarantees loan agreements and provides insurance to companies that export American goods and services abroad. However, EXIM’s footprint relative to its peers is very small, with EXIM covering one percent of U.S. exports. This is dwarfed by other EXIM-type institutions in Asia. Sinosure, one of China’s two export credit organizations, for example, covers some 16 percent of China’s exports while South Korea’s covers nearly 50 percent.
EXIM’s role in supporting American exporters in China, the U.S. – China Export Framework Agreement, and EXIM’s loan guarantees were some of the topics discussed. Hochberg discussed the different types of industries the EXIM Bank interacts with including aircraft equipment, medical and farm equipment, power equipment, and small and medium-sized enterprises (SMEs).
The U.S. – China Export Framework is meant to promote the importation of goods and services made in the U.S. by giving China’s importers more efficient access to financing. The EXIM delegation noted that under the U.S. – China Export Framework, projects are made available by the Chinese government. Currently, there are five industries that are highly prioritized: fire and safety equipment, green technology, medical tools, agricultural and a catchall manufacturing category. Under this framework agreement, a company in China could get up to 100 percent financing from a U.S. commercial bank with guarantees from the EXIM Bank, which relies on the sovereign guarantee of China.
In the Q&A session, AmCham members discussed concerns for SMEs in the export-import industry between the U.S. and China. It was explained that when U.S. businesses are unable to access private export financing, the EXIM Bank equips them with the necessary tools to compete in the global field regardless of how big or how small a company is.