China, the US, and Export Credits

I've just learned of a little-remarked result of Xi Jiping's February 2012 meeting with President Obama in Washington DC. As reported by Reuters, the US and China have agreed to open talks on setting rules and guidelines for officially supported export credits.

This small announcement is big news for China-Africa watchers. Right now, these rules and guidelines are mainly set by the OECD's working group on officially supported export credits ("aid for trade"). China, of course, is not a member, and thus is not bound by the OECD norms and rules. Any acceptable conclusion on these guidelines will have to involve more transparency by the Chinese. Transparent reporting is the heart of the Arrangement, the "gentlemen's agreement" that regulates export credit practices among OECD members. Of course the OECD does not require members to publish their individual export credit agreements to the world, just share them confidentially with the working group. But even getting annual figures broken down across regions or countries, would be a huge advance.

A hat tip to Richard Carey.

Inside Trade adds a bit more to this:

The agreement announced last week by the United States and China to pursue a common set of international guidelines on official export financing by 2014 is aimed at creating a new framework that would ultimately replace the export credit arrangement that currently exists between members of the Organization for Economic Cooperation and Development (OECD), according to a Treasury Department official.

A hat tip to Michal Makocki.

Related to the export credit talks is the release a few weeks ago of a General Accounting Office (GAO) comparative study of export financing practices, mainly focused on the G-7 (remember them?): "U.S Export Bank: Actions Needed to Promote Competitiveness and International Cooperation."

As part of this, the GAO revealed that the US Eximbank (Ex-Im):

• "financed 132 transactions totaling $812 million in 20 sub-Saharan African countries. Ex-Im dedicates two full-time employees to promoting exports to sub-Saharan Africa; others work part-time on the issue" (p. 21). 
• Between 2000 and 2010, China Eximbank's total export credit support grew from $4 billion to over $36 billion, while US Ex-Im's "financing increased from about $13 billion to $24.5 billion (p. 39)."  

We can assume that China Eximbank has more than two full time people working on boosting business in Africa!