Holding the China International Import Expo (CIIE) and expanding imports are one of the major measures taken by China to advance its opening up to a higher level and promote mutual benefit and win-win outcomes for China and the rest of the world. It showcases China’s firm determination to expand opening up in the new era and its sense of responsibility as a major economy to push forward the development of global trade and investment and the building of a community with a shared future for mankind. It’s the mission and responsibility of China Eximbank, a financial institution specialized in serving China’s foreign trade, investment and international economic cooperation, to support the expansion of China’s imports.
Injecting new impetus to the world economic growth
China, by holding the 3rd CIIE as scheduled, shares the Chinese market with other countries to jointly promote trade development and safeguard free trade and globalization. This is China’s contribution to the world with great practical significance.
During the past 40 years, especially since joining the WTO in 2001, China has been taking actively participation in the international division of labor and expanding imports to help promote trading partners’ economic growth. China’s total import volume grew by an average annual rate of 12.6% between 2001 and 2019, 6.3% higher than the global average.
China Eximbank has spared no efforts in supporting China in expanding imports and sharing development benefits with other countries. The volume of import loans provided by the Bank has totaled RMB2.4 trillion since 2006 when the business first started. By the end of September 2020, the Bank’s outstanding balance of import loans totaled RMB600 billion, with over 1,200 ongoing projects. These projects both supported the import of technologies, equipment and products in short supply in China, and satisfied the needs of domestic economic development. What’s more, they played an active role in maintaining the balance of international payments and promoting stable and sound economic growth. In addition fo credit support, the Bank has also extended its service coverage, and made full use of the existing diversified financial service system to provide whole-process financial support to enterprises with consulting service, intermediate business such as performance guarantee and import L/C, and capital market operations such as forward foreign exchange settlement and foreign exchange swap.
Connecting Better the International Market with the Domestic Market
China’s economy has transitioned from a high-speed growth stage to a high-quality development stage. In 2020, CPC Central Committee made the decision to foster a new dual cirulation development paradigm.
To better connect the international market with the domestic market, China Eximbank always stands at the forefront of reform and constantly improves its business system. The Bank is now ready to better serve the new development paradigm of dual circulation by supporting both export and import through the five key business categories, namely credit, equity investment, capital market operations, trade finance and consulting service.
To foster a new development paradigm, it is necessary to hold the CIIE, expand imports and improve foreign trade balance. And it is China Eximbank’s responsibility to support the CIIE.
Expanding imports can improve the quality of domestic supply system and help deepen the supply-side structural reform. Taking the CIIE as an opportunity to expand the import of high-quality and high-tech products can push forward the upgrade of outdated domestic production capacity and increase the input-output efficiency of domestic production factors with external competition pressure. Meanwhile, the technology spillover effect can better motivate innovation awareness and vitality of domestic enterprises and promote the growth of strategic emerging industries.
Expanding imports can also promote consumption upgrading. China’s consumption contributed 57.% of its economic growth in 2019, remaining the biggest driving force 6 years in a row. In 2019, China’s import volume through cross-border e-commerce was RMB2.74 trillion, an year-on-year growth of 30%. The strong purchasing power reflects Chinese consumers' vigorous demand for overseas products and services. Taking the CIIE as an opportunity to expand import of consumer goods and trade in services can, on one hand, enrich the supply channels of domestic consumption, satisfy the increasing demand of the Chinese people to live a better life and increase the people’s sense of contentment and happiness, and on the other hand facilitate consumption backflow and, further leverage the driving effect of consumption for the high-quality economic growth.
Supporting the expansion of imports by mobilizing all kinds of resources
To support the third CIIE, China Eximbank has strengthened coordination and planning to precisely support its clients in expanding imports, and better allocate its financial resources to support imports.
First, focus on key sectors and optimize layout in the international market. By setting up a RMB350 billion special line of credit to support imports, the Bank supports Chinese enterprises to diversify import channels with a focus on the Belt and Road countries, promotes the integration of foreign trade and investment as well as the coordinated development of trade in goods and services, thus promoting both domestic and international circulations. The Bank has made full use of the USD5 billion special fund for financing imports from Africa to provide financing support for African companies in their export of agricultural and industrial products to China.
Second, press ahead with innovation and enhance financial product development. Based on the financing demand of enterprises, the Bank introduced the “Jin Bo Rong 2020”, a tailored financial solution including consulting, financing, payment and hedging, to satisfy enterprises’ funding demands in expanding imports and help them increase core competitiveness.
Third, follow market-oriented principle and optimize the structure of imports. To serve domestic structural adjustment and consumption upgrading, the Bank supports the import of intermediate goods, advanced technology and equipment that could help economic transformation and development. It also supports the import of high-quality consumer goods, agricultural products that could help increase industry competitiveness and resource products with strong domestic demand, so as to push forward the development of trade in services and the import of productive service.
Fourth, make good use of FinTech to support imports more precisely and efficiently. The Bank actively uses the big data to dig and integrate information of imported goods and enterprises, and prioritizes enterprises, projects and sectors to precisely identify funding demands and provide targeted support.
China Eximbank will provide all-around support to the CIIE and contribute to creating new prospects for China’s opening up.