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BEIJING, Jan. 5 (Xinhua) -- Chinese exporters face an increased risk of not being paid for their goods as foreign banks run out of cash and some overseas importers evade paying debts, China's Ministry of Commerce (MOC) warned Monday. "The cases of malicious debt evasion and breach of contracts by importers in certain countries or regions are on the rise," said the ministry in a notice. It attributed the phenomenon to the impact of the deepening global financial crisis. The MOC urged local governments, guilds and overseas Chinese businesses to more closely monitor the credit of foreign importers. Priority should be placed on tracking the credit ratings of foreign lenders, it said. The ministry also called on local governments to support the development of export credit insurance and encourage exporters to carry such insurance by reducing premiums. From January to November last year, China Export & Credit Insurance Corporation (SINOSURE) provided 56.5 billion U.S. dollars of guarantee for exporters against credit risks such as payment default. That is 63.6 percent higher than the same period a year earlier. The reason for the increase is that more exporters sought insurance, company figures show. SINOSURE is China's only policy insurance company undertaking export credit insurance. In that period, SINOSURE paid 210 million U.S. dollars of indemnities, up 174.5 percent from the same period of 2007. In December, the insurer reduced credit ratings for a record 48countries, including the United States. A total of 191 countries were reappraised in December.
BEIJING, Dec. 1 -- Amid the coupling effects of shrinking global demand and rising operating costs, it has been a dramatic upheaval this year for domestic small and medium-sized enterprises (SMEs) after China started its reforms 30 years ago. Even as the scene appears a bit scary, there is still a ray of hope if only entrepreneurs note the writing on the wall and go all out to cut costs before they raise the clamor for a bailout.Two women make beds on a production line of the small private firm Nangang Shoemaking Factory in Foshan, Guangdong province.In the first half of 2008, much before the world saw the capital markets going topsy turvy amid the global economic slowdown, over 67,000 SMEs in China went bankrupt, while more than 10,000 labor-intensive textile enterprises downed shutters, according to figures from the Department of SMEs under the National Development and Reform Commission. In October, 714 companies were closed in Dongguan in Guangdong province, home to over 60,100 private companies and a major manufacturing center in China. "We will see more companies closing in the coming months, with the figure likely to cross 1,000 after Christmas," says Dongguan Deputy Mayor Jiang Ling. Most of the international buyers of Chinese products failed to get letters of credit in October leading to significant cancellations of Christmas orders, says Frank FX. Gong, chief China economist at JPMorgan Securities (Asia Pacific) Limited in a recent report. "Indeed, 'things suddenly ceased' was the common comment we heard on the ground lately," he says. But for some like Luo Chun, sales director of tin box maker Dongguan Tinpak Co, the freeze on Christmas orders has not yet meant closing. Luo says overseas order fell by 10 percent from June to October, normally the peak time for Christmas orders.

SAN JOSE, Nov. 17 (Xinhua) -- Visiting Chinese President Hu Jintao on Monday spoke highly of the rapid development of China-Costa Rica relations and pledged efforts to further expand bilateral cooperation in various fields. During talks with Costa Rican President Oscar Arias Sanchez on the second day of his state visit to the Central American nation, Hu said mutually beneficial cooperation in various fields has been growing steadily. Noting the fast growth in bilateral ties over the past year, the Chinese president said the two countries have also carried out fruitful cooperation in international and regional affairs. Chinese President Hu Jintao(L) meets with Costa Rican President Oscar Arias(R) in San Jose, Costa Rica, Nov. 17, 2008 "Facts have proven that the establishment of diplomatic ties between China and Costa Rica conforms to the fundamental and long-term interests of both countries and peoples," Hu said. The two countries set up diplomatic ties in June 2007. "The enhancement of Sino-Latin American mutually beneficial cooperation is conducive for our common development," Hu said, noting that the Chinese government has issued a Policy Paper on Latin America and the Caribbean recently. The two countries should make efforts to push for long-term, sound and stable development of bilateral ties and cooperation, Hu said. "China is ready to work with Costa Rica to open up a bright future for bilateral ties characterized by mutual respect, equality, mutual benefit, sincere cooperation and friendship for generations to come," he added. On economic cooperation, Hu said the two countries should strengthen their cooperation mechanisms and expand areas of cooperation. Hu hoped the two sides would reach agreement on a free trade pact at an early date, in the spirit of friendly consultations and mutual understanding and accommodation. The Chinese government will continue to encourage competent Chinese enterprises to invest in Costa Rica, he said. It will also support pragmatic cooperation between enterprises of the two countries in such key areas as infrastructure, agriculture, telecommunications and energy, he added. Arias agreed with Hu's views and stressed the importance of strengthening trade and economic ties with China. Costa Rica hopes to strengthen cooperation with China in port construction, development of high-tech parks as well as Chinese language teaching, he said. Arias said he hoped the two countries would establish a dialogue mechanism at a higher level so as to further promote the development of bilateral ties. The two leaders also exchanged views on the global financial crisis and agreed to strengthen coordination and cooperation in international affairs. After their meeting, the two leaders witnessed the signing of 11 cooperation agreements on trade, economy, finance, energy, education and technology, and announced the launch of bilateral negotiations on a free trade pact. China is Costa Rica's second biggest trading partner. In 2007, bilateral trade amounted to 2.8 billion U.S. dollars, a 33-percentincrease over the previous year. Also on Monday, Hu met with Francisco Pacheco, president of the Costa Rican Legislative Assembly. The Costa Rican legislators come from different political parties, but they have the consensus on maintaining and developing the friendship between the two countries, Hu said. The Chinese president hoped the two countries' legislative bodies would strengthen contacts and make efforts to promote mutual understanding. He also expressed the hope that Costa Rican legislators would play a greater role as a bridge linking up the two countries' business groups, cultural bodies, scientific institutes, news media and local governments in efforts to consolidate and expand the social foundation for the friendship between the two nations, Hu said. Pacheco said the establishment of diplomatic ties has helped promote mutual understanding and friendship between the two peoples and also created a favorable environment for strengthening bilateral economic and trade cooperation. After the establishment of diplomatic ties with China, Costa Rica now has an "important friend and partner" in the world, he said. Speaking at the meeting, many Costa Rican legislators from different political parties agreed that the establishment of diplomatic ties is of strategic significance. They also thanked China for providing support and help for Costa Rica in its economic and social development. The Chinese president, who is on a five-nation tour, flew in on Sunday from Washington, where he attended a Group of 20 summit on the current international financial crisis. This is the fist state visit by a Chinese head of state to Costa Rica and Central America. He will also visit Cuba, Peru and Greece, and attend the Economic Leaders' Informal Meeting of the Asia-Pacific Economic Cooperation (APEC) forum in the Peruvian capital of Lima.
BEIJING, Nov. 17 -- Chinese banks should be alert to the risks of growing bad loans and narrowing profit margins amid a worsening global financial crisis and domestic interest rate cuts, a senior banking regulator has warned. China Banking Regulatory Commission Vice Chairman Jiang Dingzhi told a financial forum in Beijing on Saturday that China's banking system, despite being generally healthy, faces growing risks. "Our judgment is that losses at overseas financial institutions will widen further, and capital shortfalls will become more serious," Jiang said "The financial crisis won't end in the near term. So we should not turn a blind eye to the risks " Jiang said, warning that the first risk China may face in the coming years is "exported inflation" from developed economies. He said many developed economies have taken quick action to inject huge liquidity and credit into their banks to stabilize financial systems and it is likely that the banks will export capital to developing countries such as China (through direct investment or loans). "That may cause high inflation (for us) and we should keep a close eye on cross-border capital flows," said Jiang. Jiang also warned that bad loans, especially in the real estate sector, are the second risk that China's banks are confronted with. "Bad loans are already showing an upward trend, especially in the property market where the mortgage default risk is growing at an accelerating pace," Jiang said, without elaborating. Jiang also said Chinese banks may encounter growing losses from their overseas investment as the global financial crisis remains "far from over". The government said earlier that Chinese banks suffered "very limited losses" overseas as their exposure to bankrupt global financial companies was not much. Jiang said Chinese banks also face narrowing profit margins as the central bank cuts interest rates to boost the slowing economy. Banks are encouraged to lend after the government announced a 4 trillion yuan (586 billion U.S. dollars) stimulus plan a week ago. The People's Bank of China has cut interest rates thrice this year after economic growth cooled to 9 percent in the third quarter, the slowest rate in five years. He said the banks will see declining profits next year as lower interest rates shrink margins and loan defaults may increase. However, Jin Liqun, chairman of the supervisory board of China Investment Corp, said Chinese banks should continue market-oriented reforms despite the risks. "All these risks cannot be used as excuses to defer further reform in the banking system," said Jin at the forum. "Only with market-oriented reforms can our banks further build up their capabilities in profit-making and risk-prevention." Jiang said China's banking system remains "in good health" with all major indicators at their best levels ever. Banks' total assets, 59.3 trillion yuan at the end of September, were five times the level of 10 years ago when the Asian financial crisis erupted, he added. And banks reduced their average bad-loan ratio to 5.49 percent at the end of September, from 6.3 percent at the end of March. "These sound indicators are the basis of our confidence to battle financial crisis," Jiang said.
Li Changchun (5th R, 2nd row), member of the Standing Committee of the Political Bureau of the Communist Party of China (CPC) Central Committee, poses for photos with artists after a concert celebrating 30 years' reform and opening-up in Beijing Dec. 10, 2008. (Xinhua Photo) BEIJING, Dec. 10 (Xinhua) -- Li Changchun, member of the Standing Committee of the Political Bureau of the Communist Party of China (CPC) Central Committee, watched on Wednesday night a performance that marked the 30th anniversary of the country's reform and opening-up. The concert in Beijing featured poem recitation and chorus of songs as an ode to the achievements China has made in the past 30 years. It was one of a series of performances organized by the China Literature and Arts Federation to commemorate the anniversary. Liu Yunshan, member of the CPC Central Committee Political Bureau and head of the CPC Central Committee Publicity Department, and State Councilor Liu Yandong also attended the event.
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