- About Wuxi
Recently, SINOSURE (China Export & Credit Insurance Corporation) Jiangsu Branch and Bank of China Jiangsu Branch bank consortium issued a RMB and USD export buyer's credit warranty for Wuxi Guolian Huaguang Power Engineering Co., Ltd. to build the thermal power plant project of Sihanoukville Special Economic Zone (SSEZ). According to reliable information, it was the first cross-border RMB export credit insurance business for overseas industrial parks in China and the first cross-border RMB export credit insurance business in Jiangsu.
Located in PreybNob District, Sihanoukville, Cambodia, SSEZ is an international industrial park jointly developed and constructed by Hodo Group, a key enterprise from Wuxi, and Chinese and Cambodian enterprises. In order to build a self-generation power plant in the industrial park, SSEZ has actively cooperated with Wuxi Guolian Huaguang Power Engineering Co., Ltd. and signed a PC agreement for project construction. However, the payment currency of the commercial agreement was inconsistent with that of repayment of project earning in the future.
After comprehensively considering the resulting exchange costs, exchange rate risks and the appeal of using RMB in cross-border businesses between China and Cambodia of SSEZ, SINOSURE Jiangsu Branch planned a comprehensive solution of “applying 2 currencies in the same agreement” for the enterprise. After the joint efforts made by all sides, the project was approved the export buyer's credit insurance letter of intent in March, 2021. A loan agreement for the project was officially signed in June. The export buyer's credit insurance warranty was issued on June 28. By then, the project succeeded in financing.
According to relevant person in charge of the Wuxi Municipal Financial Regulatory Bureau, through the active promotion of the new model of cross-border RMB settlement between China and Cambodia by SINOSURE, the successful implementation of the project of SSEZ can effectively help companies reduce exchange costs and avoid exchange rate risks. It was a beneficial practice for promoting the building of key overseas cooperation industrial parks of Belt and Road Initiative and the international application of RMB.