Israeli ECA increases China exposure
The Israel Foreign Trade Risks Insurance Corporation (Ashra) has increased its guarantee potential by US$400mn for exports to China.
The export credit agency’s (ECA’s) decision, approved by the Knesset Finance Committee last week, is part of the most recent expansion of protocol signed by the Israeli and Chinese finance ministries to encourage trade between the two countries.
In the past three years, China and Israel have signed two other financial protocols, funding US$700mn of Israeli investment and commerce in China in over 200 deals, mainly in the medical device and telecommunications sectors. The latest expansion brings the protocol to US$1.1bn.
Israel’s finance minister Yuval Steinitz says: “Expanding the scope of the agreement will aid in financing many export deals from Israel to China. The prevailing instability in global markets and in Europe in particular increases the need to divert Israeli exports to developing and new economies around the world, focusing on the Orient and with an emphasis on China, which constitutes an economic world power.”
Under the agreement, credit deals can become cash deals for Israeli exporters, allowing them to receive payment immediately, while the buyer can spread out payments over a long period.