In Depth: China’s Exporters Get More Help to Withstand Trump’s Trade War

The Chinese government has intensified its support for exporters through two expanded trade credit insurance programs to counter increasing uncertainties in the country’s export sector, primarily amid the ongoing tariff war with the United States. This move comes in response to evolving geopolitical tensions and protectionist measures, specifically the U.S.’s imposition of additional tariffs of up to 145% on Chinese imports, which have unsettled China’s prospects for stable export growth.[para. 1]

In a tentative step towards easing this standoff, senior officials from China and the U.S. met in Geneva and, on May 12, jointly announced that most additional tariffs imposed on each other's goods would be either suspended for 90 days or removed altogether. This temporary relaxation aims to create breathing space for further negotiations over persistent economic and trade disagreements. However, despite this development, future risks remain due to the challenging nature of bilateral talks and the enduring impacts of former tariffs, suggesting that China will continue its strong backing of exporters for the foreseeable future.[para. 2][para. 3]

Li Yunze, head of the National Financial Regulatory Administration (NFRA), emphasized at a May 7 press briefing the crucial role that credit insurance has played in stabilizing China’s export sector in the early months of the year. The NFRA, China’s top financial regulator, has made supporting the foreign trade sector a priority, focusing on the expansion and optimization of both export credit insurance (protecting exporters against non-payment by foreign buyers) and domestic trade credit insurance (covering non-payment risks in domestic transactions due to issues like buyer bankruptcy or delayed government payments). New policies include improving underwriting capacity, offering preferential rates, expediting claims processing, and lowering banks’ reserve requirement ratios for the first time since September, as well as reducing the central bank’s key policy interest rate by 10 basis points to a record low.[para. 4][para. 5][para. 6][para. 7]

A testament to the growing demand for export credit insurance is the 15.3% year-on-year increase in coverage for short-term export credit insurance during the first four months of the year.[para. 8] Local governments in key export regions have also taken action: Yiwu, an export-intensive city, now subsidizes up to 80% of export credit insurance premiums for local firms, part of a 10-point package to support private economic growth. Shenzhen, the mainland's top exporting city for 32 consecutive years, has introduced similar policies, including free export credit insurance for small and midsize firms that exported less than $8 million last year, and enhanced claims collaboration with China Export and Credit Insurance Corp.[para. 10][para. 11][para. 12]

In addition, the NFRA is establishing a domestic trade credit coinsurance scheme to help exporters navigate a pivot to the domestic market, spreading risk across multiple insurers and making it easier to insure larger transactions. This move responds to the challenges exporters face inside China, such as unfamiliar buyers and extended payment terms. The recent growth in domestic trade credit insurance reflects rising demand from sectors like energy, construction, and manufacturing, in line with China’s dual circulation strategy, which aims to foster internal consumption alongside selective global trade engagement.[para. 16][para. 17][para. 18][para. 19]

Recent government efforts, including new guidelines from the National Development and Reform Commission, seek to spur domestic trade credit insurance growth by enhancing underwriting practices and encouraging connections between companies and insurers, further integrating China’s domestic and export economies.[para. 20][para. 21]