SINOSURE and international banks: collaborating for win-win results
International banks, leveraging their global presence and risk management expertise, are working jointly with SINOSURE, known for its strong track record in risk mitigation, to support projects involving Chinese exporters. In the context of China’s high-level opening up, both sides have increased opportunities to expand cooperation into broader markets, fostering win-win outcomes and driving sustainable growth together.
High-level opening up is a defining feature of Chinese modernisation, and enhancing cooperation with international banks is a vital aspect in the opening up of the financial sector. With their global presence, strong risk management capabilities, and extensive experience in international financial regulations, international banks are well-positioned to play a crucial role in facilitating Chinese exporters, EPC contractors, and investors in their overseas market development.
As a professional risk management institution, SINOSURE received the same ratings from Fitch, S&P, and Moody’s as sovereign ratings of China for consecutive years, making it highly recognised by financing banks for its role in risk mitigation. Meanwhile, to better serve the needs of our clients, we have designed various products and flexible solutions for bank partners. As Chinese exporters’ participation in the global market develops, SINOSURE acts as a bridge to connect international banks and Chinese exporters to unlock the potential of overseas markets. With the principles of “extensive consultation, joint contribution, and shared benefits”, SINOSURE and international banks are writing new and exciting chapters.
As of the end of June 2024, SINOSURE had concluded cooperation agreements with more than 40 international banks. Among these were two international banks ranked in 2023 among the top ten banks in terms of insured amount for medium- and long-term export credit insurance and overseas investment insurance,[1] ranking fourth and sixth respectively. For short-term export credit insurance, there were five international banks among the top ten banks in terms of financing facilitated, accounting for 30% of the insured amount. Guarantee businesses are also seeing a steady growth in cooperation between SINOSURE and international banks in the past few years.
Sharing new opportunities in high-end manufacturing with complementary advantages
The Chinese ship-building sector entered the international market early and has gained global competitiveness. Chinese shipyards have been achieving rapid development both in terms of technology and global influence. To better serve the Chinese ship-building sector, efforts have been made by SINOSURE to improve its underwriting policies to ships, design new financing structures, and expand its coverage for high-end segments such as large LNG carriers, high-end roll-on/roll-off vessels, large dual-fuel container ships, etc. The insured amount in the ship sector has steadily grown in recent years.
Ship financing is characterised by large amounts, high financing ratios, and long tenors. International banks thus play an important role in supporting Chinese shipyards with their industrial expertise, cost-competitive funding, dedicated teams, and knowledge of international rules and regulations. By number of deals, more than three quarters of ship projects in SINOSURE’s portfolio are financed by a single international bank or a syndication that is led by an international bank. Top-tier banks in ship financing have been awarded Best Bank Partner and Special Contribution Bank by SINOSURE.
Towards the shared goal of sustainable development
Chinese enterprises are playing a leading role in the low-carbon transition, emerging as major global suppliers of wind and solar power products, as well as electric vehicles. To adapt to their needs, SINOSURE has implemented a comprehensive green development framework that defines its top-level design standards, underwriting policies, and risk management approaches. International banks, sharing the same vision of sustainable development and leveraging their considerable green finance expertise, collaborate closely with SINOSURE to help Chinese exporters expand their overseas markets through green supply chains.
Offshore wind represents as an increasingly important source for renewable energy development. SINOSURE recently successfully concluded a EUR 425m twelve-year green loan financing with a consortium of eleven international banks for the construction of two P-class offshore wind turbine installation vessels from a shipyard in Jiangsu Province. The first vessel was successfully delivered in August 2024. This represented a first for SINOSURE in supporting a wind turbine installation vessel globally, and demonstrates the efforts SINOSURE has made to promote the green transition.
In September 2023, Chinese wind power giant AESC achieved financial close for its EV battery gigafactory in Douai, France. SINOSURE provided cover for the EUR 216 million facility provided by seven international banks. The cover was SINOSURE’s landmark project finance transaction for the new energy battery sector, and the export buyer’s credit insurance policy provided a 95% indemnity ratio. The project won Europe Industrial Deal of the Year in the Project Finance International (PFI) 2023 Awards, presented by Reuters. This serves as a strong example of how new, high-quality Chinese productive forces are bringing momentum to global green supply chains.
Innovative solutions for cross-border financing
The overseas funding needs of Chinese enterprises are becoming increasingly complex. For example, the approval of medium-and-long term facilities may take time and require a bridge loan for the construction period. In response, SINOSURE provides the solution of a “domestic guarantee with an overseas loan”, offering a financing guarantee for contractors obtaining foreign currency-denominated loans from banks registered outside China. With this guarantee, Chinese contractors become increasingly competitive in securing overseas orders.
International banks play a significant role in the aforementioned overseas loans, as their costs for hard currency lending are relatively low. Over the past ten years, the business facilitated by the “domestic guarantee with an overseas loan” programme has exceeded USD 8 bn, of which twelve international banks account for more than 90%. Further, with their global presence, international banks collaborate with us in indirect guarantee (bid, advance payment, warranty, etc.) business.
Future prospects and collaborative growth
International banks have always been valuable partners to SINOSURE. To adapt to the changing global financial landscape, SINOSURE has taken steps to enhance support for international banks. We have established smooth communication mechanisms with key international bank partners in the forms of seminars where potential projects can be recommended and discussed to find the best financing solutions. We also continuously improve our products, such as the special version of the refinancing insurance project for international banks and the tailor-made subrogation form for international banks.
Looking ahead, the scope of cooperation between SINOSURE and international banks is set to expand further.
‘Small and beautiful’ projects. As overseas projects develop and transform, projects with a small amount, better returns, enhanced risk control, an appropriate financing structure, and a focus on sustainability have become a significant trend and new driver of growth. This is in line with international banks’ risk preference and will become the new focus of their cooperation with SINOSURE.
New forms of trade. In 2022, SINOSURE provided its first medium- and long-term buyer’s credit insurance for the construction of an overseas warehouse in Poland, with an international bank acting as the arranger. China’s recent promotion of new forms of trade, exemplified by cross-border e-commerce trade and overseas warehouses, is expected to create new opportunities for international banks.
Local currency financing. As Latin American and African countries continue to face a funding gap for infrastructure, international banks can leverage their advantages in local currency financing in their collaborations with SINOSURE to better serve third-party markets.
International banks are significant participants in and observers of the opening up of the Chinese financial market. As China continues to promote high-level financial opening, SINOSURE is ready as an ECA to join hands with international banks, contributing its institutional wisdom from the export credit insurance industry towards the high-quality development of international trade and the global economy.
- Including banks as the insured in export buyer’s credit insurance, export deferred payment refinancing insurance as well as overseas investment insurance debt insurance ↑
