JBIC rule change will allow higher risk and boost lending

(Financial Times, Tokyo, 14 June 2016) Japanese investment in Asean infrastructure is set to rise. The Japan Bank for International Cooperation (JBIC) has changed its lending rules to allow higher risk investment through a special account... Power and transport infrastructure projects are likely to be the main targets for Japanese firms. JBIC currently has ¥1.6tn ($15bn) in outstanding commitments to Asean countries, with much of the investment in power plants and other power-related infrastructure. The rule change will allow Japanese companies to better compete for contracts with Chinese competitors, as the two rivals vie for influence across Asean. Many projects in Asean previously fell foul of stringent [ECA] credit standards, but now Japanese firms investing in the region with the support of the government - a cohort referred to as Japan Inc - will be able to compete more aggressively with rivals from China. [Questions as to whether these rules comply with OECD and WTO rules on ECA state subsidies to exports seem inevitable, and if not, why not?]