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Growing into the Future for Bilateral Trade JOHNSON C.T. LIAO Senior Vice President & General Manager Export Insurance Dept. The Export-Import Bank of the Republic of China Apr.05.2013. in Brazil 1 EXIMBANK of R.O.C. Growing into the Future for Bilateral Trade Contents Preface Exports & Imports Snapshots ( Brazil, Peru, Mexico, El Salvador V.S. Taiwan) EXIMBANK of R.O.C. (“EXIMBANK”) Introduction & Snapshots 2 Business Trend of EXIMBANK How To increase the Bilateral Economic Relationship EXIMBANK of R.O.C. Growing into the Future for Bilateral Trade Preface~ The importance of International Trade to Taiwan 3 Y=C+I+G+( X-M) EXIMBANK of R.O.C. Growing into the Future for Bilateral Trade Taiwan need to expand our trade scope Russia 0.5% Canada 0.8% EU 9.2% U.S. 11.8% Middle East 2.4% The 5 Countries of Central America 0.2% Brazil 0.8% 4 Brazil 0.59% Peru 0.10% Mexico 0.54% El Salvador 0.04% Total 1.27% S. Korea 4.0% Japan China 5.9% 40.2% India The Philippines 1.4% Malaysia 2.3% Singapore 2.2% 5.5% Indonesia 1.6% ASEAN Australia 1.2% 16.7% Africa 1.0% Total export in 2012: US$308.3 billion New Zealand 0.1% EXIMBANK of R.O.C. Growing into the Future for Bilateral Trade 1st and 2nd IC foundry provider 4th NB and branded PC maker 2nd and 3rd TFT-LCD maker 2nd mobile phone chipset maker and 4th IC designer 4th NOR Flash IC maker 5 EXIMBANK of R.O.C. Growing into the Future for Bilateral Trade Facing the Competition and substitution of Emerging Markets Taiwan better get prepared to integrate toward upstream Downstream: Only price competition Upstream: Good way to elevate product value 2012 Exports US$301.1 Bn Materials Russia & Middle-East Material Processing & Hightech Equip. Global Market 6 Intermediate Product Processing Final Product Taiwan & Processing China & Asean S.Korea Europe/USA/ Japan 2012 Imports US$270.7 Bn EXIMBANK of R.O.C. Growing into the Future for Bilateral Trade Taiwan and Brazil Exports & Imports Stats Year 2010 2011 2012 Remark EX & IM IC, Oil products from Asphalt Imports from US$1.9Bn Taiwan Exports to Taiwan US$2.35Bn US$1.83Bn extracts, electric appliance for receptor and monitor, etc. US$2.44Bn US$2.99Bn US$2.79Bn Iron ore, Soy bean, Sweet Corn Total US$4.35Bn US$5.35Bn US$4.62Bn Trade Value 7 EXIMBANK of R.O.C. Growing into the Future for Bilateral Trade EXIMBANK of R.O.C.– A Policy Bank EXIMBANK is a full-implementation agency of the ROC government's trade and economic policies; i.e., Providing financial services and assisting manufacturers to expand markets in foreign trade. The best helper and partner of Taiwanese exporters and foreign buyers. A 100% government-owned bank owned by Ministry of Finance (MOF, Taiwan) EXIMBANK of R.O.C. – A Provider for Financing Service & Export Credit Insurance EXIMBANK also proactively provides relevant financing projects and export credit insurance services to assist corporations to diversify export markets, to enhance competitiveness in foreign trade , to accelerate export trade business and to create domestic employment opportunities. 8 EXIMBANK of R.O.C. Growing into the Future for Bilateral Trade The Export-Import Bank of R.O.C 9 Established: 1979 (33 years old ) Capital: US$ 400 million ( NT$12 billion) Chair of the Board Directors:Phd. Chrystal Shih Location: Taipei, Taiwan Employees: 200 (42 work for EI Dept.) Head Office: Taipei Branch: Hsinchu, Taichung, Kaohsiung BIS Ratio : 31.60% 2012 Fitch rating ( Long-Term Foreign Currency IDR:AAA+;Outlook Stable) Website: www.eximbank.com.tw EXIMBANK of R.O.C. Growing into the Future for Bilateral Trade EXIMBANK of R.O.C. Organization Chart Board of Directors Chairman President Executive Vice President Export Insurance Committee Credit Committee Executive Vice President & General Auditor Executive Vice President Auditing Office Ethics Office Personnel Office Dept. of Accounting Legal Affairs Section 10 Dept. of Risk Management Information Management Section Dept. of Administrative Management Offshore Banking Branch Kaohsiung Branch Dept. of Finance Dept. of Export Insurance Taichung Branch Dept. of Loan and Guarantee Hsinchu Branch EXIMBANK of R.O.C. Growing into the Future for Bilateral Trade Export Credits Types of Export Credit: (1)Supplier’s Credit (2)Buyer’s Credit (3)Relending Facility (4)Shipbuilding Financing,etc (5) Mid/Long-Term Financing/Guarantee Services Overseas Investment Credit 12 EXIMBANK of R.O.C. Growing into the Future for Bilateral Trade What is Relending Facility A type of financing provided by EXIMBANK to a foreign bank that in turn relends the funds to its clients for the purchase of various products from Taiwan Beneficial to both foreign buyers and Relending Banks as the former is able to enjoy import financing with installment repayments while the latter can easily get funds from the EXIMBANK Repayment Export Import Bank of ROC (Taiwan) Loan Payment 13 Taiwanese Exporter Foreign Buyer EXIMBANK of R.O.C. Growing into the Future for Bilateral Trade Export Contract Repayment Funding Relending Bank (Foreign Country) Outline of the Relending Facility • A revolving line of credit from EXIMBANK to a foreign bank. • The foreign bank makes a loan to their clients for importing goods from Taiwan. • Reimbursement of funds from EXIMBANK to the foreign bank after delivery of goods by Taiwan exporter. • Repayment by the foreign bank to EXIMBANK. 14 14 EXIMBANK of R.O.C. Growing into the Future for Bilateral Trade Outline of the Relending Facility Risk sharing scheme-EXIMBANK undertakes the repayment risk of the foreign bank The foreign bank undertakes the repayment risk of the importer 15 15 EXIMBANK of R.O.C. Growing into the Future for Bilateral Trade Relending Banks EXIMBANK has cooperated with 42 banks in 20 countries up to April, 2012. 16 16 EXIMBANK of R.O.C. Growing into the Future for Bilateral Trade Financing Terms and Conditions 17 Eligible goods: Exported from Taiwan Currency: US dollars Percentage of Financing: Up to 85%-100% of transaction Interest Rate: Floating at 6- month LIBOR plus a margin Tenor : consumer goods: from 6 months up to 1 year non-consumer goods: up to 5 years Repayment of Principal: In one lump sum on the maturity date semi-annual installments (tenor > 1year) Payment of Interest: Interest paid every 6 months 17 EXIMBANK of R.O.C. Growing into the Future for Bilateral Trade MOST COMMON PAYMENT TERMS FOR TAIWANESE EXPORTERS 1. C.W.O. (Cash With Order) 2. C.A.D. (Cash Against Documents) 3. L/C (Leter of Credit) (1) Sight L/C (2) Usance L/C 4. D/P (Document against payment) 5. D/A (Document against Acceptance) 6. O/A (Open Account) 7. Installment 8. Consignment 18 EXIMBANK of R.O.C. Growing into the Future for Bilateral Trade TAIWAN INTERNATIONAL TRADING TREND (PAST 20 YEARS) 100% Year L/C N-L/C Year L/C N-L/C Total L/C 1991 57.2% 42.8% 2009 12.2% 87.8% Total Non-LC 1992 53.2% 46.8% 2010 11.7% 88.3% 1993 47.5% 52.5% 2011 11.6% 88.4% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source from Central Bank of Taiwan 19 EXIMBANK of R.O.C. Growing into the Future for Bilateral Trade Comparison of Methods of Payment in International Trade in R.O.C. 20 Letter of Credit Documentary Collection Open Account EXIMBANK of R.O.C. Growing into the Future for Bilateral Trade Details of our Insurance Products 1.L/C Export Credit Insurance 2.Comprehensive D/P, D/A Export Credit Insurance 3.Comprehensive Open Account Export Credit Insurance 4.Overseas Investment Credit Insurance 5.Overseas Construction Credit Insurance 6.Global-Sure Credit Insurance-whole turnover policy 21 EXIMBANK of R.O.C. Growing into the Future for Bilateral Trade Performance of EXIMBANK 2012 22 Insured Amount: NT$ 896.03 million (22.06% increase V.S 2011) EXIMBANK of R.O.C. Growing into the Future for Bilateral Trade Business Trend of EXIMBANK ~ 2012 Insured Area 23 EXIMBANK of R.O.C. Growing into the Future for Bilateral Trade Business Trend of EXIMBANK ~ 2012 Insurance Covered by Industry 24 EXIMBANK of R.O.C. Growing into the Future for Bilateral Trade Business Trend of EXIMBANK ~ 2012 Loss by Region 25 EXIMBANK of R.O.C. Growing into the Future for Bilateral Trade Business Trend of EXIMBANK ~ Amount covered in recent 7 years 26 EXIMBANK of R.O.C. Growing into the Future for Bilateral Trade Trade Performance of EXIMBANK to Brazil US$/ Thousand ITEM Export Insurance Export Credit YEAR 2010 2011 2012 Sub-Total Total 27 83,578 5,702 56,977 3,133 37,032 8,722 177,587 17,557 195,144 EXIMBANK of R.O.C. Growing into the Future for Bilateral Trade How could EXIMBANK of R.O.C. increase the Bilateral Economic Relationship Credit Services Medium and Long-Term Export Credit Medium and Long-Term Import Credit Overseas Investment Credit Overseas Construction Credit Technology Export Credit Short-Term Export Credit International Accounts Receivable Factoring General Export Credit 28 EXIMBANK of R.O.C. Growing into the Future for Bilateral Trade How could EXIMBANK of R.O.C. increase the Bilateral Economic Relationship Guarantee Services Export Guarantee Import Guarantee Overseas Construction Guarantee Shipbuilding Guarantee 29 EXIMBANK of R.O.C. Growing into the Future for Bilateral Trade How Could EXIMBANK of R.O.C. Increase the Bilateral Economic Relationship Export Insurance Services Comprehensive D/P, D/A Export Credit Insurance Comprehensive Open Account Export Credit Insurance Safety Export Credit Insurance for Small Medium Enterprises Global-Sure Credit Insurance Export Credit Insurance for L/C Medium and Long-Term Export Credit Insurance Overseas Investment Credit Insurance Overseas Construction Credit Insurance 30 EXIMBANK of R.O.C. Growing into the Future for Bilateral Trade EXIMBANK of R.O.C. Growing into the Future for Bilateral Trade Thanks for your patience The Export-Import Bank of the R.O.C Website: www.eximbank.com.tw Tel: +886.2.3322.0582 Fax:+886.2.2395.8316 31 EXIMBANK of R.O.C. Growing into the Future for Bilateral Trade