(Financial Times, New York, 23 September 2024) Coalition of 14 governments announces financing network for projects to provide raw materials required by tech industry. Western nations are directing their development finance and export credit agencies to work with private industry to support critical minerals projects, in a drive to break China’s chokehold over a sector that is essential for high-tech industries. The Minerals Security Partnership, a coalition of 14 nations and the European Commission, will unveil a new financing network at an event in New York on Monday as they try to ramp up international collaboration and pledge financial support for a huge nickel project in Tanzania, backed by mining company BHP.
China
US Law Firm Claims Chinese ECA Sinosure pursues overseas importers to pay off unpaid debts
(Harris Sliwoski, Los Angeles, 17 July 2024) US law firm accuses Sinosure of pressuring clients to pay off Chinese factories for allegedly owed money. They claim the Chinese state-owned export credit insurance company actively pursues overseas companies for alleged unpaid debts on behalf of Chinese manufacturers saying “Sinosure subsidizes Chinese companies and then aggressively seeks reimbursement from overseas companies. It often hires debt collectors and law firms to chase foreign companies for money supposedly owed to its insured Chinese manufacturers. A foreign company pays a Chinese manufacturer an advance for a large order. The rest is owed upon delivery. The shipment arrives, but the quality is terrible and unusable. The foreign company refuses to pay the balance owed and requests a refund or new products. The Chinese company goes silent or tries to negotiate. Then Sinosure jumps in. Sinosure demands payment through threatening calls or letters. It threatens to sue the foreign company in China or its home country.” They publish “China Sinosure as Existential Threat and Fighting Back Against Fake (and Real) Sinosure Claims: A Primer“
JBIC signs credit line of up to US$3 billion for Adnoc
(The Asset, Hong Kong, 10 July 2024) Japan Bank for International Cooperation (JBIC) has signed a general agreement with Abu Dhabi National Oil Company (Adnoc) to provide a credit line of up to US$3 billion. The Japanese export credit agency will contribute US$$1.8 billion. The proceeds will fund projects related to decarbonization and energy transition to be implemented by Adnoc or its subsidiaries in the United Arab Emirates or internationally. Adnoc, an energy company wholly owned by the Emirate of Abu Dhabi, aims to achieve net zero by 2045. It promotes renewable energy, hydrogen and ammonia as fuel sources, carbon capture and storage (CCS), and other green energy initiatives. According to JBIC, Abu Dhabi has been a stable and important supplier of crude oil to Japan for more than 40 years, and as such, is a strategic partner for Japan’s energy resource strategy. In addition, Abu Dhabi has high potential in the field of decarbonization and energy transition as it has abundant resources for renewable energy and subterranean structures suitable for CCS.
USEXIM President Testifies on U.S.-China Economic Competition
(C-Span, Washington, 27 June 2024) Reta Jo Lewis, president and chair of the U.S. Export-Import Bank, testified before the House Financial Services Subcommittee National Security, Illicit Finance, and International Financial Institutions on oversight of bank operations and U.S.-China economic competition. Several topics were addressed, including fossil fuel and green energy investments, U.S. manufacturing and trade, workplace culture concerns, and challenges posed by China’s Belt and Road Initiative. She also spoke on the bank’s China and Transformational Exports Program (CTEP), which helps U.S. exporters remain competitive with China in key export areas, such as artificial intelligence (AI), wireless communications, renewable energy, and semiconductor manufacturing.
US Congress Examines Role of EXIM Amid Intensifying Economic Competition with China
(US Congress, Washington, 24 June 2024) The US Congress House Financial Services Subcommittee Chairman on National Security, Illicit Finance, and International Financial Institutions, led by Chairman Blaine Luetkemeyer (MO-03), held a hearing entitled “The Role of the Export-Import (Ex-Im) Bank of the United States Amid Intensifying Economic Competition with China.” He noted ““That threat is the bid for global economic domination posed by Communist China. Unlike the United States, the CCP does not subscribe to the rules-based order that has governed trade and export credit financing for nearly a century. The CCP demonstrates daily that it plays by its own rules and will do anything to gain footholds in strategic sectors vital to security. China’s highly aggressive actions in export credit financing blend beyond economic advancement and are clearly an effort to enhance its global power and economic might. It is critical, the United States compete and win in this arena against China.”
Nigerian Civil societies urge China to rescind proposed East African crude pipeline project
(Nigerian Tribune online, Ibadan, 26 June 2024) Civil society organisations have called on the Chinese government to rescind its decisions to build crude oil pipeline across East African countries. In an open letter to the Chinese Embassy’s Charge d’affaire Zhang Yi, Smith Nwokocha of StopEACOP Nigeria called on China to stand with people on the right side of history and not finance the EACOP projects. He explained that as a local civil society organisation working alongside people who directly and indirectly have been or will potentially be impacted by the East African Crude Oil Pipeline project and the associated upstream oil projects (the EACOP projects) in Uganda, Tanzania, and the Democratic Republic of the Congo (DRC), together, and alongside partners across the world, operate as the StopEACOP Coalition. “China’s reported support is in stark contrast with the assessments of major global financial institutions, and as a result is being seen as the last resort for saving these deeply controversial projects. As of 26 June 2024, 28 insurance and reinsurance companies, 4 Export Credit Agencies, 27 commercial banks and the African Development Bank have publicly ruled out support for EACOP.” “Several have explicitly attributed their decision to concerns over EACOP’s ongoing and anticipated environmental and social impacts. For example, Standard Chartered Bank, which was considering financing the project, ultimately declined to do so after conducting an environmental and social due diligence assessment.” “A range of studies by various independent experts, international organisations, as well as local civil society organisations that support the project affected people, have shown that the EACOP project and the associated Tilenga and Kingfisher oil field projects will bring high risks to climate, biodiversity, and RAMSAR wetlands, as well as the livelihoods of local communities and sustainable development of our countries.”
Brazil’s Petrobras tightens ties with Chinese banks and Sinosure
[BNAMERICAS, Santiago, 10 June 2024) Brazil’s state-run oil company Petrobras is tightening its financial ties with China. The federal oil giant’s actions in this area have gathered momentum since the beginning of 2023, when President Luiz Inácio Lula da Silva assumed the country’s presidency. Last year, Petrobras signed MOUs with China Development Bank (CDB) and Bank of China to assess investment opportunities and cooperation in low carbon initiatives and green finance. Last week, the company announced it had signed an MOU with China’s export credit agency Sinosure, with the same goals. The deal with Sinosure followed a series of agreements inked with Chinese companies such as China Petrochemical Corporation (Sinopec), China National Offshore Oil Corporation (CNOOC), China Energy International Group and Citic Construction Co. (CITIC).
Export credit and West vs Chinese strategic minerals
(Mining News, Perth, 19 June 2024) Australian Strategic Materials (ASM) is aiming to become the first global company to go from rare earths mining all the way through to metals. Rare earths are considered critical minerals and demand is set to surge, making ASX-listed ASM well-placed to capitalise as it holds holds one of the country’s most advanced rare earth element deposits, the Dubbo Project, in New South Wales. ASM made significant headway in this area when it recently received non-binding letters of interest from the Export-Import Bank of the United States (US EXIM) for up to US$600 million, and up to A$400 million from Export Development Canada (EDC) in debt financing for the Dubbo Project, in addition to conditional finance support of A$200 million previously received from Export Finance Australia. Interest from US and Canadian agencies stems from enhanced policy alignment between Australia and North American jurisdictions on the importance of establishing an alternative critical minerals supply chain. “They needed a non-China source of material, so for us, being an early leader in it means we’re now in this process where we’re validating our product with all of them to qualify to be a supplier,” ASM Director Rowena SmithSmith said.
HKECIC signs Guangdong pact with Sinosure
(The Standard, Hong Kong, 23 May 2024) The Hong Kong Export Credit Insurance Corporation signed a pact with the Guangdong Branch of China Export & Credit Insurance Corporation, Sinosure, yesterday to strengthen cooperation on export credit insurance services for businesses across Guangdong and Hong Kong.
US EXIM enters the battle against Chinese boycott of Lithuania
(ABC News, Washington, 27 May 2024) After Lithuania allowed Taiwan’s de-facto embassy in Vilnius to bear the name Taiwan, instead of Taipei — Taiwan’s capital city — as preferred by Beijing, Lithuanian businesses saw their cargo shipments to and from China stranded, and they were warned by major European businesses that Lithuanian-made auto parts would be barred from products for the Chinese market. Instead of caving in, Lithuania asked for help and American diplomats sought new markets for Lithuanian goods. The Export-Import Bank in Washington provided Vilnius with $600 million in export credit, and the Pentagon signed a procurement agreement with the country. The U.S. State Department has set up an eight-person team known as “the firm” to provide help to countries cut off from Chinese trade. Other examples: When a Norwegian committee in 2010 awarded the Nobel Peace Prize to a Chinese dissident, Beijing stopped buying salmon from the Nordic country. Two years later, China rejected banana imports from the Philippines over a territorial dispute in the South China Sea. In 2020, Beijing responded to Australia’s call for an investigation into the origin of the COVID-19 pandemic by raising tariffs on Australian barley and wines.
