Local exporters expect they will still need to grapple with the overseas sluggish export market in 2013 and hope that the local export trade insurer Hong Kong Export Credit Insurance Corporation (ECIC) can do more to insure their business risks for contracts involving emerging markets.

Speaking at an ECIC seminar to examine global export market prospects in 2013, Professor Chan Kei-biu, General Committee Member of the Federation of Hong Kong Industries (FHKI), said, "As the European and US market prospects will remain dim, the mainland export market can only remain stable this year, and therefore we envisage the global export market to remain challenging for local exporters in 2013." .

A worker watches as a shipping container is transferred onto a ship by a crane in Vung Tau, Vietnam. As US and European export markets remain slow, more local exporters are switching their focus to high-growth regions such as ASEAN, Eastern Europe and Latin America.

Amid the sluggish US and European export markets, more local exporters are turning their focus to those high-growth regions such as ASEAN, Eastern Europe and Latin America. However, local exporters complained that they are not receiving adequate assistance from the government.

Another local exporter representative, The Chinese Manufacturers' Association of Hong Kong (CMA) Executive Committee Member Aaron Shum criticized the ECIC for not doing enough to help local exporters by insuring their business contracts involving various emerging markets.

"The ECIC should devote more resources to help local exporters to venture into emerging markets. Currently, emerging markets only occupy a very tiny portion of the ECIC's total business turnover," Shum said at the Friday seminar.

According to the ECIC report, the US remained the ECIC's largest insured market, growing by 18 percent in 2011-2012 fiscal year from a year ago. It was followed by the UK and the mainland which decreased 1.9 percent and increased 18.4 percent, respectively.

The statutory ECIC, formed in 1966, is fully guaranteed by the government to provide local exporters with trade insurance services.

Amy Yau, ECIC deputy general manager responded to the criticism by saying that "there are tremendous difficulties in undertaking trade insurance business involving emerging markets."

"It is extremely hard for us to gather and verify the trade and business information involving the trading partners of local exporters in those emerging markets. If we cannot do the verification job, we will be unable to conduct more trade credit business underwriting in these markets," Yau stressed, adding that the ECIC in the future will dedicate more resources to explore the trade credit business in emerging markets.

In last December, the Legislative Council approved the ECIC's contingent liability guaranteed by the Hong Kong government to be increased from HK$30 billion to HK$40 billion. With the increased capacity to provide coverage, the ECIC is now able to offer more support to local exporters.

According to ECIC figures, payment delay cases involving local exporters' trading partners in the emerging markets have not increased significantly. The ECIC said that these financial difficulty cases do not involve bankruptcy or debt restructuring. Claim payments arising from these trade credit insurance policies originating in the emerging markets are rare.

oswald@chinadailyhk.com