The China Export & Credit Insurance Company (Sinosure) signed a strategic co-operation agreement with the Changhong Electric Appliance Co on Friday, providing a package of insurance services to enhance Changhong's exports and sharpen its competitiveness in the global market.

According to the agreement, Sinosure will offer all-round insurance services to Changhong, including short-term as well as medium-and-long term credit insurance, overseas investment insurance, warranties and financing services.

Meanwhile, Sinosure is striving to improve Changhong's overseas risk management business, in a bid to make Changhong more competitive in the global market.

"Backed up by Sinosure, we are more confident in shifting our focus from merely expanding our overseas market to cross-border industrial management and integration," said Zhao Yong, Changhong's president. "These lucrative sectors come along with higher risks, and that's why we joined hands with Sinosure."

As a leading company in the electrical appliance industry, Changhong has exported more than US$8 billion worth of goods to some 90 countries and regions.

"Sinosure's support will help Changhong achieve a lasting and sound development of its overseas business," Zhao added.

Sinosure will help Changhong set up an overseas credit management scheme so that the company will be more skilled when it comes to choosing trading partners and minimizing export risks.

In 2004, Sinosure supported Changhong to tap into the overseas market through credit sales.

The capital insured is expected to hit US$200 million by 2006.

"Chinese enterprises are in urgent need of know-how in dealing with increasing antidumping measures, trade barriers, political risks and buyers' credit risks when they further exploit the overseas market," Li Zongjian, secretary general of the Insurance Institute of China, told China Daily. "Export credit insurance provides an efficient way to reduce potential risks."

In fact, export credit insurance is playing an increasingly important role in heightening Chinese exports and fuelling China's enterprises as they take on "going global" strategies.

In 2004, Sinosure, China's only policy-oriented insurance company specializing in export credit insurance, provided insurance worth about 108 billion yuan (US$13 billion) in China's exports, accounting for 5.5 per cent of China's total volume of general trade.

Source: China Daily