By Wang Lan (China Daily)
Updated: 2007-10-13 09:40

Government financial agencies are stepping up efforts to encourage domestic companies to expand abroad.

The Shanghai branches of the Export-Import Bank of China and China Export and Credit Insurance said separately they were developing products and services to cope with new demand from Shanghai firms as an increasing number expand overseas.

Zhu Wengen, head of the Shanghai branch of the Export-Import Bank of China, said the lender is introducing more tailor-made financial services to support domestic companies overseas.

"Bank services are not limited only to fund company operation but also include consultation, aimed at helping companies to identify risks involved in investing in different countries," Zhu said.

The lending rate offered by the Export-Import Bank of China to companies investing in overseas projects is 1.8 percent lower than the benchmark interest rate of commercial banks, according to Zhu.

Chen Jianguo, assistant manager of the China Export and Credit Insurance Corp, said: "Insurance service is playing an important role in promoting domestic companies' overseas expansion by mitigating risks such as defaults by overseas parties."

The Ministry of Commerce has approved 100 Shanghai companies to conduct overseas projects, accounting for 5 percent of the country's total and topping other cities in China.

Shanghai firms signed US$5.9 billion worth of overseas contracts in 2006, according to the Shanghai Foreign Economic Relations and Trade Commission.

New projects signed by Shanghai companies in the first eight months of the year amount to US$3.6 billion. The contract value for the whole year is expected to total US$6 billion.

In the past few years, Shanghai firms have set up projects in 172 countries and regions.