China banks gave out credit aid to foreign trade companies to boost the economy after the lift of COVID-19 lockdowns.
From January to November 2022, China's exports increased by 9.1% year-on-year cumulatively in US dollar terms, while imports only increased by 2.0% year-on-year.
Affected by the contraction in global demand, China's export growth will slow down from August 2022, and it is expected that the year-on-year decline will expand in November 2022.
With the adjustment of the epidemic prevention policy, the Bank of China stated that it would provide multi-currency trade financing support equivalent to 100 billion yuan for foreign trade enterprises. A variety of export trade financing products, including export bills, export discounts, order financing, export factoring, etc.
At the same time, Bank of China Insurance, a wholly-owned subsidiary of the Bank of China, launched targeted risk protection products for the potential risks that foreign trade companies face in cross-border financial scenarios.
China CITIC Bank said that the bank would officially launch the foreign trade point-based loan system in early December 2022. The system is based on factors such as the company's operating characteristics, industry status, financial status, and annual import and export volume. The system will automatically verify the credit based on the scoring results; the credit amount could be up to 20 million yuan.
Wen Bin, the chief researcher of Minsheng Bank, said that in 2023, due to the lagged impact of monetary policy tightening and inflation cost shocks, overseas economies will likely enter a recession. As the largest country in the world's foreign trade, China's decline in global aggregate demand will inevitably drag down China's foreign market, thereby putting pressure on exports. It is expected that in 2023, China's export growth rate may fall back to around -2%.
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