By Sean Higgins
The Export-Import Bank estimated Friday that China provides $130 billion in credit and trade-related financing to bolster its exports, which helps explain its dominance in world markets.
That figure is more than 10 times that of other countries that offer such financing, like Germany and South Korea.
“China stands in a league of its own as a provider of export and trade-related finance,” the bank said in a report to Congress titled "Global Export Credit Competition."
The Export-Import Bank provides loans, guarantees, and other financing to encourage foreign purchases of U.S. goods, and Friday's report sought to emphasize its role as a counterweight to similar programs in other countries. The report comes a little more than a month after the Congress restored the bank to full working order following four years of it being effectively closed down due to the lack of a quorum.
Critics in Congress, led by conservative Republicans, had blocked nominations to the bank. Prior to last month's restoration, the bank was limited to financing projects of no more than $10 million.
The report argued that that period of inactivity came as other countries were expanding their own export programs, seeing it as a reliable tool of choice because of its effectiveness and profitability.
"[M]any governments are increasingly focused on national goals and forging long-term business partnerships to maximize their country’s export footprint. A significant number of foreign (export credit agencies) have seen their export-support missions evolve from leveling the playing field for their exporters to proactively seeking to create transactions for them and advancing their strategic interests over the long term," the bank said.
Kimberly Reed, the bank's chairwoman, warned that China has been particularly aggressive in this regard and other countries are following along to stay competitive.
"[T]he performance of China’s export credit system over this period has triggered the ECAs of other governments to react defensively to change their policies and programs or risk their exporters losing access to large swaths of global markets."