On January 12, the spokesman of Bank of China (BOC) Wang Zhaowen briefed the media that the special risk fund against risk of guarantee letter for overseas contracting projects had obtained more governmental financial support. He said, in order to further support Chinese enterprises to “Develop Overseas Markets”, and to further improve China’s status in international market, recently, the Ministry of Finance of and Ministry of Commerce would continue to increase USD11.92 million on the basis of original USD45 million as the risk fund, which would further enlarge the operating space for this business of BOC. Meanwhile, more domestic enterprises involved in overseas contracting projects would benefit from this business.
Wang Zhaowen said that the “Special Fund against Risk of Guarantee Letter for Overseas Contracting Projects” was a guarantee product with distinctive features provided by BOC. Financed by national finance, this product, as a substitution for the credit facility provided by banks, provided the bidding, performance security and prepayment guarantee to qualified domestic enterprises engaged in overseas contracting projects, which to a great extent eased the fund pressure and partially solved the problem of insufficient facilitation of enterprises. Since the launch of this product at the beginning of 2002, BOC and Chinese enterprises engaged in overseas contracting projects had made close cooperation based on mutual benefit. The “Special Fund against Risk of Guarantee Letter for Overseas Contracting Projects” developed very fast in the recent 4 years. By the end of December 2005, the special risk fund had been used by more than 60 enterprises and more than 400 of guarantees had been opened to 49 countries and areas all over the world by BOC, covering public and civil works such as housing, large dam, power station, fuel pipeline, road, sanitary installation, water supply, sanitary projects, sewage treatment, enlargement and reconstruction of factories, construction of railway, which strongly supported the development of China’ overseas works and service exports and promoted the increase of exports especially the export of electromechanical products and complete equipment.
The spokesman introduced that BOC always enjoyed outstanding international reputation. The lettering of guarantee in foreign currency issued by BOC had obtained overseas acceptance in commercial activities all over the world. BOC has formed a set of complete operational management methods for guarantee business, which could provide quality, efficient and fast service. The enterprises that intended to use “Special Fund against Risk of Guarantee Letter for Overseas Contracting Projects” could directly consult to the International Settlement Department in the Head Office of BOC, and its provincial branches.
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