Overview of Role of EDC in
Maximizing Success in China
Export Development Canada
March 2, 2012
About Export Development Canada (EDC)
 Canada’s Export Credit Agency
 Crown corporation wholly owned
by Government of Canada
 Financially self-sustaining
 Operates on commercial
principles
 Conducts its activities in a
socially responsible manner
EDC’s Role
 To support and develop
Canada’s export trade and
Canadian capacity to engage
in that trade and to respond to
international business
opportunities
 Financing and insurance
solutions for exporters and
investors
 2011 Performance Highlights:
Supported $24 billion of
Canadian trade in the Asian
markets and $10.8 billion in
Greater China alone
EDC’s Major Products
 Accounts Receivable Insurance
 Contract Insurance and Bonding
 Political Risk Insurance
 Financing
 Foreign Buyer Financing
 Canadian Direct Investment Abroad (Outbound FDI)
 Domestic Financing (for Canadian exporters)
 Inbound Foreign Direct Investment (Inbound FDI)
 Equity Investments
Insurance
 Accounts Receivable Insurance – ARI
 Covers risk of non payment by your buyer – can’t pay /won’t pay.
 Contract Frustration Insurance – CFI
 single contract insurance covering work-in-progress and
receivables
 suited ideally for Canadian exporters of capital goods or services
and their Canadian suppliers
 Single Buyer Insurance
 Political Risk Insurance
 Transfer/conversion, political violence, expropriation,
arbitration award default, non honoring of sovereign
obligation.
Bonding Services
 Get bonds without tying up your working capital
 Meet the bonding needs of your export contract
 Get bonds issued without tying up your cash
 We provide guarantees to your bank so they in turn
can issue guarantees to your customers and
suppliers
 Protect yourself from wrongful calls
 EDC makes it easier to get surety bonds issued
 We share the risk with your surety company
Financing for China
 Buyer financing to mainland Chinese buyers is not
very common due to tight borrowing controls
imposed by Chinese fx authorities (SAFE)
 Often when a Chinese buyer asks for financing they
are merely asking for longer letter of credit or open
account terms
 Or this can be a sign of possible credit weakness by
the buyer
 Foreign companies in China have more flexibility to
borrow outside of China but are still subject to some
restrictions on amounts and usage
Where does EDC see a role for Financing and China?
 In support of Canadian Direct Investment Abroad
through partnership with Canadian banks
 Through creation of trade opportunities by using EDC
loans to gain access to the procurement channels of
Hong Kong based strategic corporations
 In providing working capital financing for exporters here
in Canada to create the capacity to engage in trade
8
EDC and Greater China
(Greater China : China, Hong Kong, Taiwan, Macao)
Canada’s Merchandise Exports to Greater China and EDC’s Volume
$25,000
In $ Canadian Millions
$20,767
$20,000
$15,849
$15,000
$13,216
Cdn Exports
EDC BV
$13,349
$11,865
$10,000
$9,251
$10,750
$9,993
$5,664
$5,000
$3,654
$3,021
$2,786
$3,739
$3,100
$0
Source: Strategis & EDC Economics
2005

2006
2007
2008
2009
2010
2011
Exports to China have more than doubled between 2005 and 2011 - feeding
China’s demand for raw materials and technology
Top export items include precious metals, minerals, chemicals, pulp & paper,
petroleum, oilseeds, machinery & equipment
Strategic Relationships – Greater China
10
Greater China Strategic Relationships
Headquartered in Hong Kong, Hutchison Whampoa Limited operates in
some 53 countries. It’s business activities include:
Managing some of the world's biggest ports in Hong Kong and China;
Operation of consumer retail chains including the AS Watson Group;
Energy generation, transmission and distribution (the Hong Kong
Electric Company and the holdings of Power Assets Investments worldwide);
Harbour Plaza Hotels and Resorts property development;
Providing mobile telecom services in 12 markets
Integrated oil and gas production and distribution.
Greater China Strategic Relationships
Noble is a market leader in managing the global supply
chains of agricultural, industrial and energy products.
Operating in 38 countries Noble specializes in the
origination, processing, logistics, transport and marketing
of strategic raw materials and energy products.
Their holdings include assets such as processing facilities
for agricultural products, ports and terminals, storage
facilities, mines and supply chain assets.
12
Greater China Strategic Relationships
International Far Eastern Leasing is a Sino-foreign joint
venture company which deals with financial lease holding
businesses in medical appliances, printing, construction,
industrial equipment, and education
The EDC relationship allows Canadian companies to
supply qualified capital goods to IFE for leasing to Chinese
companies
This also presents the opportunity for Canadian
companies with affiliates in China to take advantage of
sale leaseback arrangements of capital equipment to
generate working capital for the affiliate
Greater China Strategic Relationships
Founded in 1993, China Everbright International Ltd. (“CEIL”) has evolved
into one of China’s leading environmental companies. CEIL focuses the
core of its business on the alternative energy and environmental protection
sectors including:
 Waste-to-energy;
 Solid waste landfill projects;
 Biomass, solar and wind energy;
 Methane-to-energy;
 Water wastewater treatment.
Since 2003, CEIL has built nine waste-to-energy plants in China.
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Canadian Direct Investment Abroad (CDIA)
• There are currently over 500 known investments involving Canadian
companies in China (of all sizes and industry sectors)
• The stock of Canadian investment in China has increased by 16%
annually since 1998, reaching $4.78 billion in 2010
• Actively promote CDIA with Canadian Investors
• EDC can help create financial capacity for Canadian investment into
China through our Export Guarantee Program with Canadian banks
• Working capital for qualified affiliates in China may be possible
through lease back arrangements with IFE
• Accounts Receivable cover for the China domestic sales by a 100%
owned Canadian affiliate may be possible
The EDC Sinosure Connection
 Sinosure is China’s export credit insurance company
 In 2005 Sinosure and EDC signed a formal agreement in
Beijing to cooperate and coordinate efforts in support of
customers pursuing business opportunities globally
 The EDC-Sinosure Agreement serves as a framework to enter
into risk-sharing arrangements on future transactions
 Through the agreement, Canadian affiliates in China are able to
obtain accounts receivables insurance for export sales from
China
Key Contacts:
In China
In Canada
Jacques Lacasse
Chief Representative, Shanghai
 JLacasse@edc.ca
Peter Xu
Senior Regional Manager China, Shanghai
 pxu@edc.ca
Hui Wang
Associate Regional Manager, Beijing
 hwang@edc.ca
Shelly He
Administrator, Shanghai
 she@edc.ca
Mark Bolger
Regional Manager, Asia
 613-598-2508
 mbolger@edc.ca
Thank You !
Robert Sanders
Senior Account Manager, Ontario
 905-366-0307
 rsanders@edc.ca
Be sure to download the Doing Business in China Guide from the Knowledge Centre at
www.edc.ca