China Exim Bank Research Articles

The export-import bank of China and Bangladesh: a comparative overview

Purpose- China and Bangladesh are among the countries that have Export-Import Bank. EXIM Bank plays an important role in the foreign trade of both countries. The study attempts to review the overall foreign trade situation of these two countries. In order to analyse possible field scenarios the author used a qualitative manner. The prime objective of this paper is to find out similar and different aspects of these two countries' EXIM Bank by performing a comparative study. The most relevant current primary and secondary data were used to achieve this objective. Methodology- The type of study is descriptive and comparative. The author gives a brief overview of the concept of foreign trade at the beginning of the study to indicate the main area of this study. He then conducted a case study of Exim Bank of China and Bangladesh. The author has pedantically reviewed the official websites of China and Bangladesh's EXIM Bank, International publications, Government documents, Bank's annual reports, most relevant websites, etc. in order to form an idea of the current scenario of EXIM Bank in Bangladesh and China and to make a comparative overview of these two Banks. Findings-This study finds that there are more dissimilarities than similarities between these two EXIM Banks. Two major differences between these two banks are; firstly, the EXIM Bank of China is a state-funded, state-owned policy bank that has the status of an independent legal entity and is directly led by the State Council, conversely, the EXIM Bank of Bangladesh is a leading private commercial bank. Secondly, China's EXIM Bank is completely based on a conventional system and contrarily, Bangladesh's EXIM Bank is a fully Islamic Shariah-based bank. There are also other differences between these two banks in terms of mission, vision, assets, credit ratings, corporate social responsibilities, and so on. However, the study finds a few similarities between these two countries' EXIM banks in terms of a specific vision which is both the banks aim to make a contribution to the national economic development. Additionally, both the banks are involved in supporting agriculture, rural areas, and farmer. Conclusion-The study presents a general overview of Foreign Trade and its position in China and Bangladesh. Particularly, this paper makes a comparative overview of the Export-Import Bank of these two countries. Keywords: Foreign trade, export-import bank, China, Bangladesh. JEL Codes: G20, G21

Power Imbalance in Africa-China Investment and Development Deals: The Case of Zimbabwe (2000–2018)

This paper seeks to flag the reality of the socio-economic impact of power imbalance in the negotiation and implementation of infrastructural projects constructed in Zimbabwe and funded by China Exim Bank, China’s main financial arm in Africa. Reviewing the China-Zimbabwe financial deals concluded during President Mugabe’s regime from 2000 to 2018, I use existing credible online-available data and draw on analysis conducted in the framework of a PhD study carried out between 2019 and 2020. I argue that China had an overriding negotiating upper hand in these deals, which limited the economic and social gains that Zimbabwe could expect—and could obtain—from the bilateral relations. The mobilization of financial resources and popular disapproval of Chinese-led projects constitute the biggest obstacles to the efficient implementation of infrastructure development in the country. The paper underlines that the Zimbabwean population has borne the brunt, on one hand, of the predatory attitude of Chinese contractors, and on the other, of the irresponsibility of the Zimbabwean government, unable so far to formulate policies that enhance debt sustainability or to take action on citizen grievances, such as underpayment and maltreatment at the hands of the Chinese contractors. The discussion highlights how much, in the case of China-Africa relations, the ideal goal of mutual benefit for each State involved in bilateral investment agreements falls short of expectations.

Financing public infrastructure in Zimbabwe: Current trends and future alternatives

Zimbabwe requires USD2 billion annually until 2032 for financing economic infrastructure. However, the Government of Zimbabwe currently affords about 20% of this financing requirement leaving an 80% gap. The aim of the study was to establish the main sources of finance for economic public infrastructure and recommend alternative financing sources to supplement the current sources. The qualitative descriptive study collected primary data through 23 interviews conducted with officials from ministries of the Government of Zimbabwe, government departments and parastatal enterprises. Secondary data was obtained from documentary analysis. The study revealed bilateral loans from the China Exim Bank as the main source of finance for economic infrastructure, contributing USD2.1 billion whilst budget appropriations from the Government of Zimbabwe contributed USD1 billion during the 10-year period under study. Infrastructure finance was also obtained from development partners (USD200 million) and commercial and multilateral lenders (USD400 million). The study recommends developing a framework that promotes and protects private sector and/or innovative financiers of infrastructure through policy stability.

Safeguards, financing, and employment in Chinese infrastructure projects in Africa: the case of Ghana’s Bui Dam

Chinese players are now Africa’s key partner for its infrastructure sector (including water supply projects), providing approximately two-thirds of investments since 2007. The social impacts of these engagements during the construction phase are mostly portrayed in an alarmist tone within the popular press. Meanwhile, scholarly literature investigating them remains scarce. We draw on the Bui Dam, a major dam in Ghana, financed by China Exim Bank (CEB), the largest financier of infrastructure in Africa, and constructed by Sinohydro, the largest dam developer worldwide, as a case study to explore social impacts of Chinese engagements in the African water sector. We particularly examine social safeguards policies from the perspective of Chinese players, the financing modalities, and the dam’s impacts on the local labour market. We find that social safeguards policies were not within the responsibility of Sinohydro. Furthermore, financing modalities were largely favourable from a Ghanaian perspective, comparable to World Bank conditions, partly due to the successful negotiations (from the Ghanaian standpoint) during the planning and design phase of the project. Most likely, the project would not have been implemented if CEB had not stepped in to provide funding. Lastly, we find that most workers employed during construction were Ghanaian, paid significantly above the country’s minimum wage. Nevertheless, working conditions overall were questionable. This case study highlights how Chinese engagement in construction of water infrastructure may help develop projects otherwise stuck in the planning and design phase. However, labour conditions during the construction phase of these projects need to be carefully managed.

China’s role in Africa’s water sector: mapping the terrain

Since the launch of its ‘go out’ policy in 1999, China has positioned itself not only as Africa’s largest trade partner but also as its largest investor. In the water sector, Chinese companies and banks are now the biggest builders and financiers of global hydropower dams. Moreover, China has increasingly begun to implement other water-related projects, including the construction of water treatment stations and water supply projects across Africa. Chinese companies’ competitive advantage to win tenders, largely due to the financial and political support of Beijing’s institutions (Ministry of Foreign Affairs, Export-Import Bank of China (China Exim Bank), China Development Bank), plays an important role in increasing China’s footprint in Africa. However, the social and environmental implications of this increasing infrastructure development have been noticed. Given that many dams built by Chinese companies are constructed without reference to international environmental and social standards, ecological pro...

Nupela Masta? Local and Expatriate Labour in a Chinese-Run Nickel Mine in Papua New Guinea1

Studies of mining projects in Papua New Guinea, since the development of the Panguna copper mine in Bougainville during the 1960s, have contributed to our understanding of the politics of interactions between resource companies, host governments and landowners. The Ramu Nickel mine, situated in northern Papua New Guinea, is China’s largest investment in the Pacific to date at US$1.4 billion. The project is managed by a state-owned enterprise, China Metallurgical Corporation, and financed by China ExIm Bank. This venture presents an opportunity to understand Chinese resource investment in a comparative perspective. While many issues, such as conflict over land, internal migration, and the limited involvement of the Papua New Guinean state, are constant, one aspect specific to Chinese resource investment is the use (or non-use) of host country labour, and the high proportion of Chinese labour employed at the mine sites. This practice differs from the relatively limited, short-term use of expatriate labour common to Western mining projects in developing countries. The attitudes and experiences of local and Chinese workers and managers will be examined to determine what is new in this approach to resource extraction.

Chinese construction companies in Angola: A local linkages perspective

China tends to spearhead its economic overtures to African countries through high-level bilateral negotiations. These are frequently in the form of China Exim Bank loans for large-scale infrastructure projects, repaid by resource exports to China. While much is made of China's resource-based activities in Africa, less focus is placed on the converse of this relationship—the infrastructure provision that African resources buy from China. This article takes the positions that local linkages development is one of the clearest ways that African countries can benefit from Chinese construction companies' market engagement. The prevailing view is that Chinese companies contracted to undertake the construction projects financed in this way do not use local labour, materials or any other inputs in the undertaking of their contracts. Focusing on the strategic orientation of large Chinese companies state-owned enterprises (SOEs) operating in Angola's construction sector, this article seeks to uncover the determinants of their sourcing behaviour, and the manner in which this is reflected in their use of local inputs.

Redefining Foreign Policy Impulses toward Africa: The Roles of the MFA, the MOFCOM and China Exim Bank

It has long been recognised that the actors involved in crafting and implementing China's foreign policy are not always in agreement. This paper argues that the prioritisation of commercial outreach over purely political objectives in Africa has led to a shift in influence from the Ministry of Foreign Affairs (MFA) to the Ministry of Commerce (MOFCOM). To that end, the paper examines the rising prominence of China Exim Bank's concessional loans as a foreign policy instrument in Africa along with the process through which they are negotiated and implemented. Using the case of Angola, this paper shows how despite formal institutional equality, the MOFCOM is playing a far more influential role than the MFA is in defining the direction of China's foreign policy toward Africa.

Aiding Transparency: What We Can Learn About China Exim Bank's Concessional Loans

The Chinese government, through the China Exim Bank, is pledging billions of dollars worth of concessional lending to the developing world. More information on these lending practices can be gleaned from Chinese language sources than is readily available in English. However, this material is insufficient to draw more than tentative conclusions about the real nature and scope of China's concessional lending. Over 48 countries have agreements with China for concessional loans. An average loan of US $20-30 million is made available to Chinese exporting firms to develop infrastructure and facilities in developing countries. While these loan sizes are not huge when compared to other aid flows, China's status as the dominant lender of concessional loans amongst some recipients makes this program significant. Finally, it is still not clear if the loans could be considered Official Development Assistance according to the DAC definition.

Bi-lateral Policy Orientation in the Multilateral Development Policy: A Challenge for the China Exim Bank and its Accountability

This short paper examines discrepancies between free wheeling export credit agencies (ECAs) and their sibling bi-lateral aid agencies, which are subject to the global decision process for sustainable development. Each ECA is an arm of the govern- ment. The Export - Import Bank of China is no exception. Ironically, any govern- ment that finances its ECA has supported social and environmental safeguards policies, to which multilateral development banks (MDBs) are subject. China is no longer an ordinary borrower in MDBs; it is an important donor. As a responsible financier in development, the China Exim Bank needs to develop its operational pol- icies and procedures. I. The China Exim Bank in the multilateral development process 1. All export -import banks are official export credit agencies (ECAs) designed to promote the export of goods and services of the country by offering various modes of financial assist- ance to buyers. Some exim banks are explicit in declaring that they do not compete with private sector lenders, but provide export financing to fill gaps in trade financing by assuming credit and country risks that the private sector is unable or unwilling to accept. But all of them share one common policy goal in promoting the business interest of the country con- cerned. It is understood that every exim bank is an arm of the government in pursuit of national interest in its bi-lateral relations with other countries in the world.