INDUSTRY AND TRADE
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normally covered by commercial insurers, namely, commercial risks of an overseas buyer and the political risks of his country. The maximum percentage of indemnity is 90 per cent. In performing this function, the protection provided by the corporation's policies helps policy-holders to obtain from their bankers trade finance and discount facilities for export operations.
The corporation also provides policy-holders with supporting services in resolving payment difficulties, and in the supply of political and economic intelligence on overseas markets, as well as giving indications as to the credit-worthiness of individual overseas buyers.
Transactions which include documents against payment, documents against acceptance and open account invoices concluded on short-term credits (maximum 180 days) are normally insured under a Comprehensive Shipments Policy which gives protection from the date of shipment. Cover can also be made effective from the date of the contract of sale instead of the date of shipment so as to provide the exporter with protection during the manufacturing stage. For exports of capital goods and services sold on medium or long-term credits with payments spreading over two to five years or longer, the corporation provides other types of insurance policies to cater to the individual needs of the exporter.
Although the corporation itself does not provide finance, exporters find a letter of authority' is a useful form of collateral security in negotiating export finance facilities. For exports on medium and long-term credits, the corporation can, upon application, provide full unconditional guarantee directly to the exporter's banker.
Many of the corporation's business operations have been computerised. This enables the corporation to deal with policy-holders' enquiries speedily in respect of around 55 000 overseas buyers and to process 10 000 credit limit applications a year.
In 1985, close to $5,330 million in goods and services were insured by the corporation, which earned a premium income of more than $32.6 million. Some 150 claims-were paid, involving a total of $16.54 million.
In recent years, Hong Kong's exporters and manufacturers who export on the basis of irrevocable letters of credit (ILC) are increasingly facing risks at the pre-shipment, or manufacturing stage. They often find themselves having to begin manufacturing before the ILC has arrived and therefore have to face the risk of contract cancellation during the manufacturing stage. The corporation has been preparing a new pre-shipment insurance policy which is likely to be introduced in early 1986.
Hong Kong Productivity Council
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The Hong Kong Productivity Council, a statutory organisation established in 1967, is responsible for promoting increased industrial productivity in Hong Kong. The council has a chairman and 20 members, all appointed by the Governor, representing management, labour, academic and professional interests as well as government departments closely associated with productivity. It is financed by an annual government subvention and by fees earned from its services.
The council provides a wide range of industrial and management consultancy as well as process control services. It conducts a diverse range of training programmes in industrial technology, management techniques and computer-related topics. It organises industrial exhibitions and overseas study missions, and operates a technical information service. It also undertakes development work in priority areas with multiple application potential so that upon successful completion newly developed productivity improvement systems can benefit as many users as possible. In 1985, a legislative amendment provided for the