Deadline looms for US export bank
Updated: 2015-03-20 11:20
By DONG LESHUO in Washington(China Daily USA)
Fred Hochberg, chairman and president of Export Import Bank of the United States, talks on Thursday about the bank and globalization in a seminar at the Center for Strategic and International Studies. The bank is facing a closure this summer if Congress decides not extend its existence. To his right are panelists Dan Runde of CSIS and Scott Schloegel, senior vice president of the US Export-Import Bank. Chen Weihua / China Daily
The Export-Import Bank of United States, the official export credit agency, is in danger of closing down on July 1, 2015.
The bank, which seeks to finance exports that the private sector is unwilling or unable to undertake, is currently operating on a short term extension of its Congressional charter, which expires on June 30.
Given the forthcoming deadline, the discussion on whether Congress should reauthorize the bank is becoming increasingly heated.
"We look for a five-year reauthorization," Congressman Robert J. Dold said in a panel discussion that called for reauthorization on March 19 in Washington.
"There are about 60 credit agencies around the world that are financing their countries' exports," said Daniel F. Runde, director of the project on US leadership in development at the Center for Strategic and International Studies.
"Foreign credit agencies around the world are watching this debate. They would love nothing more than to let the US Exim bank go away," he said.
"Just a dozen years ago, we were the largest exporting country in the world. In 2002, Germany over took us. In 2010, China over took Germany," said Fred P. Hochberg, chairman and president of the Export-Import Bank.
"Now, in China, exports are about 30 percent of their economy. In Germany, it's 52 percent. Korea is also 57 percent. Great Britain, lovely country to visit, but they don't make a lot of things like we do, 30 percent. Where are we? We are just under 14 percent," said Hochberg. "We tied with Haiti and Rwanda. That's our peer group."
"Over the past 10 years, China has increased its export finance by about 800 percent. That's not going to stop, that's only going to grow," said Linda Conlin, president of World Trade Center of Greater Philadelphia and former vice-chair of the board of directors of the Export-Import Bank.
"China in the last two years, supported more exports than the US in the past eight years," said Don Nelson, president of Ramsgate Engineering.
Founded in 1994, the Export-Import Bank of China is owned by the Chinese government and under the direct leadership of the State Council.
Exports were viewed by the panelists as critical to boosting an economy. "Exports spur innovation," said Conlin. "Export companies tend to innovate more than those who do not export."
"The best way to grow the economy and increase jobs is through exports," said Nelson.
Critics argue that the bank may jeopardize the American spirit of open and free markets. People who think "the government picks winners and losers," Nelson argued, "do not understand the global business environment we live in."
Some question whether the bank really supports small business as they have claimed.
According to a report by Forbes, two-thirds of the Bank's loan guarantees in 2013 backed Boeing sales to rivals of US airlines like Delta.
He questioned if there would be equal opportunity "for any company to bid on projects or will shareholders handle the bidding", he said.
"More capital is certainly good, but it's got to be capital that is clear and transparent," he added.