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INDUSTRY AND TRADE
21
The Trade Development Council publishes the monthly 'Hong Kong Enterprise', half-yearly 'Hong Kong Apparel' and the annual 'Hong Kong Toys', and during the year it introduced another monthly journal, the "Hong Kong Trader', for circu- lation overseas. Two documentary films were completed and released. One of them was designed to promote the attendance of buyers at the 1977 Hong Kong Ready- to-Wear Festival and the other to brief overseas businessmen on Hong Kong's two- way trade opportunities.
Hong Kong Export Credit Insurance Corporation
As Hong Kong's export credit insurer, the corporation has over the
past 10
years protected an increasing number of exporters against trading risks. The corporation's function is to assist its policyholders to bear the monetary consequences of in- solvencies, defaults and repudiations by Hong Kong's customers. It also covers political and economic risks which make it impossible for customers to transfer pay- ments to Hong Kong.
The government established the corporation in December 1966 and, from then to the end of 1976, exports amounting to more than $10 billion had been declared to the corporation, representing about 9,000 transactions a month.
The corporation's credit control and credit assessment function is a considerable help to its policyholders, particularly the many small and medium sized Hong Kong exporters. The corporation carries out this role and indemnifies its policyholders against losses for a premium which is, on average, less than one half of one per cent.
The corporation's current exposure is in the region of $450 million. There were 72 cases of claims and claims provisions in the financial year ended March 31, 1976. These amounted to nearly $5 million. The claims arose in nearly every major export market.
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An achievement of 1976 was the completion of the changeover of all policies from 85 per cent to 90 per cent indemnity, leaving only 10 per cent of any loss to be borne by the corporation's policyholders. These now number nearly 900, who are selling to more than 25,000 overseas buyers spread over 150 countries and territories.
During the year special encouragement was given by the corporation to Hong Kong's manufacturers and exporters of capital and semi-capital goods-like ships, containers and machinery. Such revenue-producing capital equipment is often saleable abroad only if medium to long term credit is given for two to five years or even seven years. The overseas user of such equipment is normally required to pay by instalments on a quarterly or half-yearly basis until the debt is paid up.
To make it easier for financial institutions in Hong Kong to provide the required finance for such major export items, the corporation is empowered to issue its 100 per cent unconditional guarantee to banks. Some interesting export orders, which would not have materialised if credit for five years had not been available, were obtained in 1976 on this basis.