ECONOMY | Staff Reporter, Hong Kong

Government expands insurance benefits for struggling exporters squeezed by trade war

Premium discount on Small Business Policy holders will be hiked from 20% to 30%.

The Hong Kong Export Credit Insurance Corporation has rolled out additional measures to support struggling exporters and SMEs as the US-China trade disputes deepens and hits the small and export-dependent economy hard, according to a government statement. 

The discount on premium for Small Business Policy holders will be raised from 20% to 30%. Moreover, the credit limit of Small Business policy holders with credit limits on US buyers will also be hiked by 20% to a maximum of 5%.

The new measures, together with previously expanded initiatives on free buyer credit assessment and additional pre-shipment cover, will remain valid until June 30, 2019.

This comes after China issued retaliatory tariffs of $470.64b (US$60b) in US goods after the Trump administration slapped tariffs of 10% on $1.57t (US$200b) in Chinese goods in the latest and broadest round of the escalating trade dispute.

Also read: Trade tensions could hammer up to 2.2% of Hong Kong exports

“The originally proposed 25% (tariff) is now down to 10%, but still hanging in the air is whether the 25% will be kicking in by early next year, if not earlier. So I think that’s the difficulty faced by our trade and that’s why the uncertainty will still prevail. And therefore measures that we are proposing, for instance the increase in export insurance for SMEs, is so important,” secretary for commerce & economic development Edward Yau said in a statement.

Hong Kong is widely expected to be hammered hard by rising tensions between the economic superpowers after its GDP growth already slowed from 4.7% in Q1 to 3.5% in Q2 with Fitch Solutions expecting economic growth to continue trending downwards to 3% by 2019.

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