Issue 1_The Export-Import Bank of China

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Issue 1

Current Situation, Problems and Prospects of China-EU Economic, Trade and Investment Cooperation

DING Chun, SUN Lu

In 2023, due to the impact of global economic downturn, the volume of China-EU trade shrank to some extent. Nevertheless, the investment pattern shifted, with cooperation in automobile industry deepened, and new mode represented by industrial innovation parks emerged. At present, China-EU economic and trade cooperation is affected by the sluggish global economy as well as EU's "de-risking" strategy and related policies, but a promising future can still be foreseen, which will be an important force to promote global economic recovery. For details, please refer to pages 3-5 of Issue 1 of Overseas Investment and Export Credit, 2024.
　　

Global Financing for Sustainable Development in the Post-pandemic Era

LIU Xian

As a financial instrument for the implementation of the United Nations 2030 Sustainable Development Goals, financing for sustainable development is of great significance for the Era. In recent years, the world's economic and social development has suffered from public health events, geopolitical conflicts, food insecurity and climate change, and global financing for sustainable development has taken on new features in terms of scale, structure and rules. Meanwhile, it is faced with major challenges in terms of borrowing and lending, coordination and efficiency, therefore there is an urgent need to strengthen the coordination of financing policies, enhance the influence of financing for development, and promote it to develop in a more balanced and inclusive approach. It is better for China to further enhance the strategy, synergy, openness and innovation of its financing for sustainable development, so as to play a greater role in promoting the UN 2030 Agenda and the global development vision. For details, please refer to pages 6-9 of Issue 1 of Overseas Investment and Export Credit, 2024.
　　

Disclaimer: The articles in this section solely represent the personal views of the author and are not related to the positions of the Export-Import Bank of China.

Identifying Risk Characteristics of the Invest-Build-Operate Model and Promoting High-quality Belt and Road Infrastructure Development

SONG Dongsheng

The Belt and Road Initiative has become the most influential initiative for global infrastructural and economic development, which plays an important role in global governance as well as the building of a community with a shared future for mankind. As Belt and Road infrastructural cooperation shifts from high-speed development to high-quality development, it has been the consensus of all parties that the invest-build-operate model should become one of the mainstream models of high-quality development. It is necessary to speed up the exploration of risk theories and the building of risk control systems with Chinese characteristics that are in line with the reality of Belt and Road cooperation. It is also important to fully leverage the strength of private enterprises and private capital, and further improve the investment and financing policy framework, so as to inject new vitality to the development of Belt and Road infrastructural cooperation. For details, please refer to pages 10-14 of Issue 1 of Overseas Investment & Export Credits, 2024.
　　

The Role of Government and Development Financing Institutions in Promoting Private Capital Participation in Infrastructure - A Case Study of the Azura-Edo IPP Project in Nigeria

ZHOU Xing and ZHAO Kuan

Given the huge financing gap in public infrastructure, the cooperation between governments and development financing institutions helps encourage private capital participation and ease the financing difficulties of public infrastructure. Governments and development financing institutions can either provide financing for projects or mobilize private capital in multiple ways such as policy support and risk cover. By taking the Azura-Edo IPP Project in Nigeria as a case for study, this paper elaborates on how governments and development financing institutions manage to reduce project risks through institutional arrangements and make infrastructure projects feasible for private capital. For details, please refer to pages 15-18 of Issue 1 of Overseas Investment & Export Credits, 2024.
　　

An Analysis on the Completion Guarantee Requirement Facing Contractors in Privately Invested Power Projects

TONG Gang

In recent years, many Chinese contractors serve as guarantors for completion of privately-invested power projects. However, as some projects fail to be completed as agreed, contractors may face reputation damage and financial losses. As people in the industry has not yet formed a common understanding of completion guarantees, contractors may be unaware of or not concerned at all about relevant risks. By analyzing completion requirements, assumption and limitations of contractors in privately-invested power projects, this paper puts forward suggestions for actual practices. For details, please refer to pages 19-24 of Issue 1 of Overseas Investment & Export Credits, 2024.
　　

Disclaimer: The articles in this section solely represent the personal views of the author and are not related to the positions of the Export-Import Bank of China.

Key Factors in RMB Internationalization: An Evolutionary Perspective from the Petrodollar System

ZHAO Liang

The petrodollar system, which was originated from the agreement signed between the U.S. and Saudi Arabia, fostered the formation of a US dollar-dominated international capital cycle and has became the central pillar of the US dollar hegemony. Against the backdrop of the changes in global energy landscape and the international consensus on de-dollarization, the operational basis of the petrodollar system is undergoing evolution, with the dollar-cycle gradually deviating from the nature of currency as a medium of exchanges and relying more on the investment functions of US dollar. At the same time, RMB is becoming a more and more popular alternative to US dollar in trade settlement, energy transformation, digital currency and other areas, and there is an increasingly urgent need to build an international cycle for RMB, which will become a key factor pushing forward RMB internationalization. For details, please refer to pages 30-34 of Issue 1 of Overseas Investment & Export Credits, 2024.
　　

Developing the International Credit Market for RMB and Promoting RMB Internationalization in a Prudent and Solid Manner

LI Xiaojun, LIAO Junyu and LI Zifan

It is made clear in the Report to the 20th CPC National Congress that China will push forward RMB internationalization in an orderly manner. The Central Financial Work Conference in 2023 also calls for prudent and solid RMB internationalization. Studies show strong correlation between global use of RMB and its international credit market. In view of currency mismatch and insufficient liquidity in RMB international credit market, this paper, by taking into consideration relevant international experience, puts forward relevant suggestions. While the external market is highly dependent upon the Chinese economy, experiences from Belt and Road cooperation and RCEP have also created favorable conditions for RMB internationalization. To this end, China should introduce incentive policies such as special relending, so as to reduce the cost of RMB loans for overseas borrowers, form the “finance-trade-repayment” closed-loop RMB usage, expand overseas RMB credit market, and promote RMB internationalization. For details, please refer to pages 25-29 of Issue 1 of Overseas Investment & Export Credits, 2024.
　　

Disclaimer: The articles in this section solely represent the personal views of the author and are not related to the positions of the Export-Import Bank of China.

An Analysis on the OECD Development Assistance Committee's Rules and Practices

LIN Liangliang

The standards and rules formulated by OECD Development Assistance Committee have had a profound impact on the official development assistance (ODA) of developed economies since 1960s, and many of the concepts and rules have been recognized and accepted by WTO, IMF and other multilateral institutions. The study of the above-mentioned rules and practices of ODA and the analysis of its influence on ODA of developed economies can be taken as references for China’s foreign aid and international development cooperation. For details, please refer to pages 35-39 of Issue 1 of Overseas Investment & Export Credits, 2024.
　　

Disclaimer: The articles in this section solely represent the personal views of the author and are not related to the positions of the Export-Import Bank of China.

Coups d'état in Africa and China-Africa Cooperation

MA Hanzhi and YANG Xiaohua

Since 2020, there have been frequent coups d'état and turmoils in many African countries due to multiple factors including economic stagnation, insecurity and democratic failure. Some major projects supported by China in relevant African countries have been suspended, contracts have been changed, investment and financing environment in Africa has deteriorated, and Chinese enterprises have become more concerned about the African market. China should strengthen the building of overseas interest protection system as well capacity building in this regard, explore high-level cooperation between China and Africa in the area of peace and security, and interact with Africa closely at all levels, so as to promote innovative development of China-Africa practical cooperation. For details, please refer to pages 40-43 of Issue 1 of Overseas Investment & Export Credits, 2024.
　　

Development of Transition Finance in and Cooperation between China and ASEAN

LIU Yuanyi

To achieve the global goal of carbon peaking and carbon neutrality, it is far from enough to rely on developing "green" industries. Supporting economic activities and the low-carbon transition of market entities must be an important component. China and most ASEAN members are developing countries with similar industrial structures and face the same bottleneck in realizing the net zero commitment. China and ASEAN have the feasibility and compatibility in carrying out cooperation in transition finance. The two sides should strengthen exploration at mechanism level, market level and concrete practice level, deepen collaboration in transition finance, facilitate the transformation and upgrading of industrial structures, in order to live up to the net zero commitment. For details, please refer to pages 44-48 of Issue 1 of Overseas Investment & Export Credits, 2024.
　　

Disclaimer: The articles in this section solely represent the personal views of the author and are not related to the positions of the Export-Import Bank of China.