China's credit insurance subsidy program eases trading risks

BEIJING - A subsidy program to facilitate domestic small- and mid-sized traders' purchases of trade credit insurance has markedly eased trading risks, according to the Ministry of Commerce (MOC).

China has channelled a total of 260 million yuan ($40.6 million) from the central budget to the program since its creation in 2009, the MOC said.

Under the program, small- and and mid-sized commercial businesses that meet certain conditions can receive a subsidy equal to 50 percent of the paid-in premium to be covered by credit insurance, which can protect them from insolvency on the part of their domestic customers.

The program has allowed subsidies to be extended to 1,613 enterprises and benefited 35,843 traders indirectly, driving credit sales worth 337.9 billion yuan, according to MOC official Wen Zaixing.

In addition to offsetting risks and facilitating financing for small- and mid-sized traders, the policy has also removed obstacles for export companies that wish to tap the domestic market at a time when external demand has faltered, Wen said.