Banking on Energy: The Determinants of Export Credit Agency Energy Financing from China and Japan

(Global Development Policy Cente, Boston, 28 February 2018) ABSTRACT  In a very short period, Export-Import Bank of China (CHEXIM) and China Development Bank (CDB) have become some of the largest Export Credit Agencies in the world. This paper examines the extent to which CHEXIM and CDB behave similarly to Japan Bank for International Cooperation (JBIC), their Japanese counterpart in energy loans approval. Utilizing a new database on publicized overseas loans for energy from the two banks, this paper econometrically analyses the determinants of CHEXIM and JBIC’s overseas energy loans in a comparative perspective. Like their Japanese counterparts, the Chinese banks exhibit a certain degree of concern for the recipient’s domestic economy but exhibits risk seeking tendencies as well. Unlike current JBIC energy loans, Chinese energy loans have a significant correlation to China’s growing energy dependence. Contrary to c,laims that China’s ECA is a tool to gain geopolitical advantage; geopolitical concerns do not appear to be a determinant of CHEXIM’s overseas finance. (PDF file)