ENG-1981 — Page 60

INDUSTRY AND TRADE

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ECIC has a capital of $20 million and the liabilities it undertakes are guaranteed by the Hong Kong Government to the extent of $2,500 million.

The risks it protects exporters against include both the commercial causes of loss such as insolvency, bankruptcy, default and repudiation, and the political/economic causes of loss, such as war, shortage of foreign exchange, import bans and force majeure in Hong Kong's overseas markets.

Established in late 1966, the corporation has insured the export proceeds of about $24,000 million worth of goods and services supplied abroad by more than 1100 companies, $3,750 million in the last year alone. ECIC operates on a commercial basis, and must cover its costs and losses by premium earnings. Premium income since the start of its operation is approximately $110 million, and $60 million was paid in claims.

At any one time approximately $1,000 million worth of credits are at risk overseas, insured by ECIC and in the present economic circumstances of many countries this represents a sizeable risk portfolio.

In 1981 the position of many developing countries continued to deteriorate and their ability to improve the standards of living was impaired by high import costs of fuel, high interest rates for their borrowings and worsening export prospects. Some of the developed countries also faced difficulties because of weakening consumer demands, and the resulting pressures on margins for Hong Kong's exporters were a feature of the year.

These exporters therefore appreciated all the more ECIC's credit assessment and credit control system - an additional function to its insurance programme.

More cases of payment difficulties arose in 1981 than in any previous year, due to the pres- sures faced by businessmen around the world, and ECIC's claims division was kept busy in assisting policy-holders in trying to collect these receivables. In most cases these attempts were successful; however during the year, 112 claims cases arose, involving a payout of $9.9 million; additionally provision had to be made for another 50 cases of $8.8 million. As a member of the Interational Union of Credit and Investment Insurers (the Berne Union) since 1969, ECIC is in regular consultation with its fellow credit insurers within the union. It has benefited greatly through a constant exchange of views on underwriting techniques, credit experience and information on the economic and financial situation of importing countries all over the world. The 1982 General Meeting of the Berne Union will be held in Hong Kong during February. Some 80 overseas delegates from about 28 countries are expected to attend this conference.

The corporation is the only government-owned export credit insurer in the world which enjoys reinsurance facilities with one of the largest private reinsurance companies.

The corporation is assisted in its business by an advisory board comprising 12 members occupying leading positions in the government and in the banking, manufacturing and exporting communities of Hong Kong.

Hong Kong Productivity Council and Centre

The Hong Kong Productivity Council, a statutory organisation established in 1967, is responsible for promoting the increased productivity of industry in Hong Kong. The council comprises a chairman and 20 members, all appointed by the Governor, represen- ting management, labour, academic and professional interests as well as government departments closely associated with productivity matters. It is financed by an annual government subvention and by fees earned from its services.

The executive arm of the council is the Hong Kong Productivity Centre which provides technology, industrial consultancy, computers, technical information, economic analyses,

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