Shanghai acts to grow solid MNCs

Shanghai plans to nurture globally competitive state-owned multinational companies by using financial leasing and export credit insurance, according to a document by the Shanghai Commission of Commerce Wednesday.

Five to eight of these multinational companies should be ranked in the country’s top 100 within three to five years, the document said.

Shanghai will support these companies through financial leasing and export credit insurance to help them avoid defaults caused by unpredictable conditions like a political crisis overseas, the document said.

Financial leasing refers to the use of certain fixed assets like machines, ships or aircraft within a set period of time in exchange for a sum of capital.

The export credit insurance policy can protect companies’ foreign receivables and is widely used in international trade and investment.

An official with the Shanghai branch of the China Export &Credit Insurance Corp (Sinosure) said that with more companies expanding their business overseas and keeping risks under control, the policy value of Shanghai’s export credit insurance jumped 10.6 percent from a year earlier to US$25.6 billion last year.

By using financial leasing and export credit insurance, an unnamed client of the local branch of Sinosure producing drilling machines sealed a US$20 million order in Iraq, said Lu Dong, vice general manager of Sinosure.

Shanghai’s outbound direct investment surged 32.75 percent last year, compared with the national average of 16.8 percent.