Laws of the People's Republic of China

Circular of the Ministry of Commerce and China Export & Credit Insurance Corporation about Using the Export Credit Insurance to Further Support the Export of Farm Products

Shang Mao Han [2006] No.80

The authorities of commerce in charge in all provinces, autonomous regions, municipalities directly under the Central Government, and cities separately designated in the state plan, as well as Xinjiang Production and Construction Corps, all business agencies of China Export & Credit Insurance Corporation:

This year Japan and EU carried out new food safety regulations sequentially which raise the threshold of market access of food and farm products by a great margin, as a result the export of our farm products faces greater challenges. Expanding the export of superior farm products is not only an efficient way that can help to increase farmers' income, promote the agricultural restructuring and resolve the problem of agriculture, rural areas, and farmers ("Sannong" for short herein), but an important reflection of the implementation of the scientific view of development and the change of the growth pattern of foreign trade. Whereas this year is the first year of the "11th Five-Year Plan", in order to implement the spirit of the Several Opinions of the Central Committee of the Communist Party of China and the State Council on Promoting the Construction of New Socialist Countryside (Zhong Fa [2006] No.1), build rural harmonious society, strengthen the support of the "Sannong" work, further enhance the export of superior farm products, strengthen the export credit risk management of the enterprises in the business of farm product export and improve the international competitiveness of these enterprises, the relevant issues on using export credit insurance to support the export of farm products are hereby notified as follows:

1.

To establish the working mechanisms supporting the export of farm products. The authorities of commerce in charge at various levels and all agencies of China Export & Credit Insurance Corporation shall establish effective working mechanism of communication and coordination, find out the situation of the enterprises in the business of farm product export and take pertinent policies and measures on export credit insurance to support the export of farm products actively.

2.

To strengthen publicity and encourage enterprises to actively cover the export credit insurance. The local authorities of commerce in charge shall strengthen publicity through multiple channels. The regions with mature conditions may adopt corresponding supportive measures in light of the actual situation and encourage the enterprises in the business of farm product export to use the financial instrument of policy export credit insurance in order to evade the risks in export proceeds of foreign exchange, upgrade their own credit rating, expand the export scale and improve the international competitiveness.

3.

To alleviate the fund shortage of farm product enterprises and upgrade the credit rating thereof. China Export & Credit Insurance Corporation will continue actively assisting the enterprises in the business of farm product export in resolving the problem of fund shortage by means of financing under insurance and other products. The credit-trade cooperation and credit-bank cooperation shall be strengthened so that a matching financing system to support the farm product export may developed gradually. The trade financing of the enterprises in the business of farm product export shall be strengthened; and the credit rating of the enterprises shall be improved constantly.

4.

To provide value-added services in respect of credit insurance for farm product enterprises. China Export & Credit Insurance Corporation will keep on providing traditional export credit insurance services as well as a package of assembling products, like pre-shipment risk guarantee, export-related domestic credit insurance, and guarantee products that match the export credit insurance. The export buyer management mechanism for enterprises meeting conditions shall be established. The online business operation system of "All in Credit Insurance" shall be put into operation. And such value-added services as country risk report, industrial analysis report and risk management recommendation shall be given priority to.

5.

To provide convenient services for small- and medium-size enterprises in the business of farm product export. China Export & Credit Insurance Corporation shall cancel the insurance threshold, simplify the formality and provide convenient services for small- and medium-size enterprises in the business of farm product export. All agencies of China Export & Credit Insurance Corporation shall, in light of the actual situation of the local small- and medium-size enterprises, provide comprehensive insurance products therefor, and offer such preferential services as primary coverage, flexible rate, rapid settlement of claim and compensation in advance in accordance with the insurance-worthy export volume where conditions permit.

All entities concerned shall study and carry out the relative work seriously, and also keep track of and find out the new situations and problems arising in the work of export credit insurance of farm products in time. These entities shall feed the relative situation back to the Ministry of Commerce (Foreign Trade Department) and China Export & Credit Insurance Corporation (Business Development Department) at any time.

Ministry of Commerce

China Export & Credit Insurance Corporation

July 28th, 2006