Firms get insurance help to ease trade war painTop News | Tereza Cai 20 Sep 2018
A heftier discount will be offered to small enterprises when buying export credit insurance and the government will provide credit guarantees amid the risks posed by the Sino-US trade war.
The Hong Kong Export Credit Insurance Corp said the discount on the premium for enterprises with an annual turnover of less than HK$50 million will be increased from the original 20 percent to 30 percent.
In addition, if those enterprises buy the export credit insurance because of the United States importers, each credit limit will be raised by 20 percent to a maximum of HK$5 million, Secretary for Commerce and Economic Development Edward Yau Tang-wah said.
The enhanced measures, which provide Hong Kong exporters, especially small and medium enterprises, with more support and protection amid the unpredictable trade issues and rising credit risks, are effective until the middle of next year.
The corporation will also provide assistance with the credit guarantee for companies with less than HK$50 million annual turnover.
It is studying how to increase the funds offered by the SME Financing Guarantee Scheme and extend the loan period.
Jimmy Kwok Chun-wah, chairman of the Federation of Hong Kong Industries, said after the United States removed some products from the tariffs list, the value of the affected products amounted to the total value of China's exports through Hong Kong to the United States.
That should be from about 49 percent to 48.5 percent, which was of little impact, Kwok added.
However, China's US$60 billion (HK$468 billion) tariffs on the US goods will impact about 70 percent of the total value of US exports through Hong Kong to China.
The head of the Hong Kong Trade Development Council's Greater China research team, Billy Wong, said the negative impact of the trade war on Hong Kong will emerge gradually amid the increasing uncertainty.
Given the conflict's potential to escalate, he suggested companies move production bases and explore emerging markets. He added that the list of US$200 billion tariffs did not cover the major traditional re-export consumer goods, including clothing and toys, which was good news.