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INDUSTRY AND TRADE
Hong Kong Export Credit Insurance Corporation The Hong Kong Export Credit Insurance Corporation (ECIC) is a statutory corporation established in 1966 to issue insurance contracts which protect exporters and manufacturing exporters against risks of monetary loss arising from non-payment by their overseas buyers for goods and services supplied on credit. The ECIC is autonomous in its day-to-day operations, with major formulation and changes in policy being subject to the approval of the Financial Secretary. Its capital of $20 million is provided by the government which also guarantees the underwriting liabilities up to $5,000 million. The corporation, which is required to operate commercially, is assisted in the conduct of its business by a 12-member advisory board.
As a member of the International Union of Credit and Investment Insurers (the Berne Union), the corporation has regular access to confidential and updated economic and marketing information on all major trading countries.
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The primary function of the corporation is to improve the competitiveness of Hong Kong's exports of goods and services by protecting policy holders against monetary losses arising from those risks not normally covered by commercial insurers, namely, commercial risks of an overseas buyer and the political risks of the country in which the buyer is located. The maximum percentage of indemnity is 90 per cent.
The corporation provides protection on transactions which include documents against payment, documents against acceptance or open account invoices concluded on short-term credits (maximum 180 days) from the date of shipment. The cover is normally in respect of domestic exports and re-exports from Hong Kong. Shipments from a third country directly to overseas buyers may similarly be covered. Cover can also be provided from the date of the contract of sale of domestic goods insured so as to protect the manufacturing exporter 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 cor- poration can provide tailor-made insurance policies to cater for individual needs of the exporters.
The corporation also provides policyholders with supporting services in the supply of political and economic intelligence on overseas markets, indications as to the credit- worthiness of individual overseas buyers and in resolving payment difficulties.
Although the corporation itself does not provide finance, exporters find the insurance policy a useful form of collateral security in obtaining export finance facilities. For exports on medium and long-term credits, the corporation can, however, provide a full uncondi- tional guarantee directly to the exporter's banker.
The corporation's business operations have been computerised. This enables the cor- poration to deal with policyholders' enquiries speedily in respect of around 60 000 overseas buyers and to process some 10 000 credit limit applications a year.
In 1988, close to $10,000 million in goods and services were insured by the corporation, which earned a premium income of more than $63 million. Some 70 claims were paid, involving a total of $37 million.
Other Trade and Industrial Organisations
There are a number of major trade and industrial organisations, each formed to provide for the needs of their members. In common, they represent their members' views to the government and other bodies, and are in turn consulted on many issues. The organisations include: The Hong Kong General Chamber of Commerce, founded in 1861, comprises more than 2 700 companies representing all branches of commerce and industry. The chamber is