As trade war deepens, a state-owned insurer in China helps soften the blow
As the U.S.-China trade war intensifies, an insurance company run by the Chinese...
FILE PHOTO: Men sit at a booth of China Export and Credit Insurance Corp, known as Sinosure, at the regional trade fair East China Fair in Shanghai, March 1, 2013. REUTERS/Stringer
Sinosure has boosted the number of new clients by thousands since last August, often relaxing its standards to do so, company data and two Sinosure sources familiar with the standards say.
Last year, as the trade war started to bite, Sinosure’s claim payouts surged more than 40% to nearly $2 billion, according to data from the company, which is owned by an investment company controlled by the finance ministry.
“We’re fulfilling our role as a policy insurer, not a for-profit commercial institution,” said the official who spoke on the condition of anonymity because he was not authorized to talk to the media.
Eugene Weng, a Shanghai-based attorney who represents Chinese exporters in trade investigations, said it was unclear if Sinosure’s practices might trigger WTO scrutiny.
Dan Harris, a lawyer who represents U.S. importers, said he has received increasing requests for help dealing with Sinosure demands for payment on behalf of Chinese exporters.
In 2018, the total sum insured by Sinosure jumped 16.7% to a record $612 billion, the fastest annual pace in six years. Premium income rose just 6%, reflecting the non-commercial nature of many of Sinosure’s insurance policies.
Other cities and regions have also partnered with Sinosure subsidize or refund premiums for smaller exporters exposed to the U.S. tariffs, a Sinosure source said.
“Another increase in tariffs is just a tweet away,” he said, referring to U.S. President Donald Trump’s preferred method of communication.
Reporting by Cheng Leng in BEIJING, Samuel Shen and Engen Tham in SHANGHAI; Editing by John Ruwitch and Lincoln Feast.Read more: Reuters Top News
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