US Exim's role in the Republican/China trade and political war

(TXF News, New York, 16 July 2020) The US administration [and corporate media] has drastically upped the ante in its economic war against China with its actions against Huawei. At the same time, US Exim has been charged to not only promote US exports and jobs but also counter Chinese state financing where necessary. For Exim, which came back from its virtual 7 year moribund state when it was fully reauthorised on 20 December 2019, there is much work to be done to rebuild relationships with overseas markets and actively support US exports and jobs. But one of the additional requirements for US Exim under its new mandate is to directly counter China’s two ECAs – Sinosure and China Exim. Beijing is using its ECAs, along with several other state entities, to expand its economic influence and gain a competitive advantage against the United States, the U.S. Export-Import Bank said in its annual competitiveness report. China’s official medium- and long-term export credit activity from 2015 to 2019 was at least 90 percent of that provided by all G-7 countries, the report found. Anti-China sentiment has grown significantly through this year and the Covid-19 period in particular. As such, the widening of the trade war to unilaterally introduce sanctions on a company such as Huawei drastically broadens the scope of the US economic confrontation with China. But for US Exim, even fully funded, and for that matter other ECAs globally, they still face an uphill struggle in competing against Chinese ECAs which not only have huge financial resources at their disposal, but also a big start in many markets – particularly within Africa - where China Inc has spent years developing its trade and investment foothold. China has not been afraid to fly the China Inc flag by extending itself over longer terms and with cheaper debt. Many other ECAs are part of the OECD Consensus and for certain market activity they [are supposed to] follow specific agreed guidelines. China is not part of this. Some observers have categorised China’s trade and investment activities in Africa as a new form of colonialism.  There never has been, nor will there ever be a true ‘level playing field’. EXIM's new mandate charged it with a goal of reserving not less than 20% of the agency’s total financing authority (ie $27 billion out of a total of $135 billion) “to directly neutralise China’s export subsidies for competing Chinese goods and services."  Republican members of the China Task Force have expressed gratitude for "the Export-Import Bank’s multi-pronged efforts to combat the Chinese Communist Party’s (CCPs) predatory practices that put American workers and companies at a disadvantage."