Good news for chdx?
Note the comment about medical equipment.
Ex-Im Bank Chief, in Asia, Urges Priority on China Lending
7/29 NY Times
nytimes.com
By MARK LANDLER
ONG KONG -- In a sign of the new emphasis the United States is placing on China as an economic engine for Asia, the chairman of the Export-Import Bank wants China to become its largest recipient of loans to buy U.S. products and equipment.
The official, James Harmon, promised to push for an increase in lending to China, which currently has loans and trade guarantees of $5.5 billion, and is the Ex-Im Bank's second-largest borrower after Mexico.
"China is a phenomenal opportunity for U.S. companies and a great challenge," Harmon said here Monday, adding, "It should be our No. 1 market."
Harmon was in Hong Kong as part of a 12-day tour of Asia that includes stops in Japan and Thailand. But it was clear that his focus was squarely on China, where he said he hoped to seize upon the momentum established by President Clinton's recent visit. Of the 12 days, he is spending nine in China, with visits to Beijing, Shanghai and the industrial city of Chengdu in interior Sichuan province.
The Ex-Im Bank is an independent U.S. government agency that promotes exports by subsidizing loans and providing credit guarantees so that developing countries can purchase U.S. goods.
In China this year, the bank will help finance about $1 billion worth of purchases, primarily aircraft and power turbines. Harmon said he would like to extend loans for the Chinese to buy everything from medical equipment to water-filtration systems.
He predicted that China would be hungry for loans, as it starts a campaign, orchestrated by Prime Minister Zhu Rongji, to spend $750 billion on new roads, bridges, hydroelectric projects and other public works.
Harmon said he also wanted to redress China's trade imbalance with the United States, which ballooned to $20.4 billion in the first five months of this year, compared with $16.9 billion in the similar period last year. An aide to Harmon said that during meetings in Beijing, senior Chinese officials acknowledged that the trade gap was a problem and pledged to help close it.
The Ex-Im Bank also wants to mend its relations with Beijing, which were badly strained in 1996 when it refused to subsidize loans to buy equipment for the gargantuan Three Gorges Dam project. The bank said the $25 billion Yangtze project, which involves flooding a vast area of Hubei province in central China, did not meet its environmental standards, and China obtained financing from others.
Harmon's intense focus on China is in marked contrast to that on Japan, where he spent only a day, despite extensive ties between the Ex-Im Bank and its counterpart in Japan. He said he tried to persuade officials there to consider environmental standards in deciding which countries should get loans.
Economists said the Ex-Im Bank's emphasis on China made sense, given that it is one of the few Asian countries still showing growth. "If you want to save Asia, you'd better save China first," said William Overholt, the head of research at BankBoston in Singapore. "A few tens of billions of dollars can make a big difference in China."
Indeed, the situations in other Asian countries worry the bank. It has lent several billion dollars to troubled economies like those of Thailand, South Korea and Indonesia. Given the suffocating debt and economic turbulence in these countries, some of them might have trouble paying back their loans on time.
A spokesman for the bank acknowledged that it might have to stretch out the repayment period, particularly with Indonesia. But he said no Asian country had yet signaled it would default on an Ex-Im Bank loan, adding, "A rescheduling is not a loss; it is a stretching out of a repayment."
Harmon, who was a New York investment banker before joining the Ex-Im Bank in 1997, said he believed that Asia would take three to five years to recover from its economic crisis. "A lot of people in Asia haven't lived through bear markets," he said, "so it's harder for people here." |
