[CMG Policy Radar] Strengthening Commerce–Insurance Coordination to Support Domestic Trade Credit Insurance关于加强商务和保险协同 做好内贸险有关工作的通知

China Macro Group | policy · business · strategy 

What is it?

A joint MOFCOM–financial regulator initiative to expand domestic trade credit insurance. Its nine tasks include extending coverage to SMEs and emerging businesses, improving credit-data sharing, strengthening insurers' risk controls and encouraging local governments to support implementation. Seven provinces and municipalities, plus Ningbo and Shenzhen, are identified for further exploration.

What does it matter?

Domestic trade credit insurance protects sellers against the risk that business customers fail to pay. Expanding its use could make suppliers more willing to sell on credit, particularly to smaller buyers, helping ease a constraint on domestic trade.

Implications

Medium. Foreign manufacturers and distributors selling to Chinese business customers on credit should check whether suitable policies are available and whether local support applies. Insurers and trade-finance providers may also find opportunities to develop products for underserved businesses.

Author:

Jack Lee

Analyst at CMG