In a move designed to help enterprises better hedge risks
when doing business overseas, Sinosure, China's only insurer
specializing in export and credit insurance, yesterday launched a
risk-analysis report covering 190 countries.??
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Although emerging markets such as those in Asia, Africa
and Latin America remain high risk for Chinese companies, they're
major destinations for the country's enterprises.
Afghanistan and Iraq are given grade nine implying that doing
business there has the greatest risks. "The biggest risks in those
countries are political turbulence, potential terrorist attacks and
changeable investment regulations," said Tang Ruoxin, general
manager of Sinosure.
Luxembourg, Andorra and Liechtenstein are granted the highest
rating, grade one, meaning they have the best overall environment
for business.
"Quite a number of smaller countries in Europe won very good
ratings this year," said Tang. "But around 70 percent of countries
have a grade below five which means a relatively high risk. And
they're mostly emerging economies."
Sinosure's report assesses country risks based on several
indicators such as the average default risk on corporate payments
and to what extent a company's financial commitments are affected
by the local business, financial and political situation. And it's
the first time Sinosure's report has covered all countries and
regions in the world.
China's major trading partners including the United States and
Japan were given the same grading ?as last year at level two.
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"One of our major concerns when doing overseas business is how
to prevent potential risks effectively," said Jin Kening, general
manager of the China National Chemical Engineering Corporation.
"And this report provides us with a perfect risk map."
ZTE, China's largest listed telecoms manufacturer, has similar
experience. As a company that conducts around 40 percent of its
business overseas, ZTE is particularly alert to the risks.
"Our overseas business is mainly in Asia and Africa, both of
which have comparatively higher risks," said Hou Weigui, president
of ZTE. "And US$590 million of our exports were achieved with the
support of Sinosure."
Export credit insurance is playing an increasingly important
role in Chinese exports and assisting the country's enterprises as
they venture into overseas markets. From 2004 to 2006 Sinosure
provided insurance worth approximately US$70 billion to China's
export sector.
(China Daily December 12, 2006)
