ENG-1974 — Page 49

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INDUSTRY AND TRADE

as a business centre, designed for Scandinavian businessmen and produced jointly with the Scandinavian Airlines System.

Hong Kong Export Credit Insurance Corporation

The corporation's insurance policies protect Hong Kong's exporters against losses arising from overseas buyers being unable to pay for goods shipped and services provided. Risks such as bankruptcy, default, transfer blockage or war, resulting in non-payment are not normally covered by commercial insurers, hence in 1966 the corporation was established under an ordinance of the Hong Kong Government which at that time provided an initial $300 million guarantee of the corporation's liabilities and a paid up capital of $10 million. During the past eight years the level of this guarantee was regularly increased and in late 1974 stood at $1,750 million. In March 1974, an additional $10 million capital was granted by the government, reflecting the growing liabilities undertaken by the corporation.

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The provision of this protection forms the basis of ECIC's primary function-to encourage and expand Hong Kong's exports, not only to traditional and major mar- kets like the United States, Britain and other EEC member countries but to small markets of more recent sales potential for Hong Kong made goods, such as the develop- ing countries in Africa, Asia and South America.

The corporation is assisted in its business by an advisory board consisting of 12 members occupying leading positions in the government and in the banking, manu- facturing and exporting communities of Hong Kong. As a member of the international association of export credit insurers, known as the Berne Union, ECIC has regular access to specialised economic and marketing information on all countries of the world. It maintains close links with fellow credit insurers of other major trading coun- tries.

ECIC works in close consultation with Hong Kong's banks, the Trade Develop- ment Council, Commerce and Industry Department, the Hong Kong General Cham- ber of Commerce, the Trade Facilitation Committee, the Hong Kong Exporters' Association and other commercial organisations involved in encouraging Hong Kong's exports.

The growth of the corporation's liabilities conforms with the increasing trend of giving and taking credit in international trade, and illustrates the awareness of the need for Hong Kong's consumer goods to be made available to overseas customers on similar credit terms as granted by their own local suppliers. In the year ended March 31, 1974, credit-insured exports of $1,510 million went to 155 overseas markets mainly on credit terms of up to 180 days, some on three years' credit. During 1974, the corporation introduced cover against an additional risk-repudiation of contract after shipment is made.

Legislation was approved during the year for the corporation to issue uncon- ditional guarantees of payment to banks and other lending institutions to facilitate the provision of finance to exporters of capital goods and production equipment on terms of payment to overseas buyers longer than 180 days.