ICYMI: “Battling China’s Predatory Economics to Bring Back Jobs” By National Security Advisor Robert O’Brien and EXIM Chairman Kimberly Reed
WASHINGTON — Export-Import Bank of the United States (EXIM) President and Chairman Kimberly A. Reed and National Security Advisor Robert C. O’Brien authored the following joint op-ed published online recently by Fox Business News:
“Battling China’s Predatory Economics to Bring Back Jobs”
By Kimberly Reed and Robert O’Brien
For more than a decade, the Chinese Communist Party has relentlessly attacked the American economy with tools ranging from intellectual property theft and forced technology transfer to widespread dumping and currency manipulation.
The latest manifestation of the CCP’s economic aggression is the increasing use of export financing to distort fair and free-market competition.
For Beijing, export financing helps increase its influence abroad as well as promote its One Belt, One Road initiative. By handing out money around the world at low-interest rates, Beijing can advance its strategic objectives. The goal? Global dominance by 2049.
The scope of this effort is breathtaking. From 2015 to 2019, the People’s Republic of China has offered subsidised export financing totalling 90 per cent of that provided by all G7 countries combined.
In 2019 alone, communist China provided three times with the export financing of the next-largest provider.
Chinese official financing in 2019 totalled at least $76 billion all around the world, all of it designed to further Beijing’s global objectives, and much of it targeted to reduce U.S. economic influence. That means tens of billions of dollars every year crowding out American exporters, preventing them from reaching their prospective foreign customers.
The China Development Bank, the Export-Import Bank of China, and the Chinese state-owned provider of export credit insurance, Sinosure, together with arm Chinese exporters with what amounts to an endless supply of capital, against which U.S. exporters — despite their high-quality “Made in the U.S.A.” products — face a steep uphill climb in the difficult global marketplace.
To make matters worse, Beijing does not adhere to any of the official export credit agreements the United States, and the vast majority of world nations, abide by. If they did, many of their signature corrupt, opaque, exploitative, and low-quality deals would be banned.
The PRC’s One Belt One Road initiative projects are characterised by poor quality, corruption, imported labour, and environmental degradation. These deals often leave host countries debt-strapped and beholden to their PRC financiers.
If the U.S. is to combat China’s latest form of aggression, we must step up our export financing game. Roughly three-quarters of world purchasing power and over 95 percent of world consumers are outside America’s borders.
Enter, the Export-Import Bank of the United States (EXIM), which can play a central role in levelling the global marketplace for American exporters and supporting American jobs.
After years of near dormancy, President Trump and the U.S. Senate, on an overwhelmingly bipartisan basis, restored the quorum of EXIM’s Board of Directors, thereby fully reopening the agency, and signed a seven-year reauthorisation of EXIM—the longest in the agency’s 86-year history.
The new EXIM is laser-focused on combating the threat from China. It launched a new “Program on China and Transformational Exports” to support the extension of loans, guarantees, and insurance to American exporters on terms competitive with the PRC’s.
EXIM’s goal is to reserve at least $27 billion in financing to “neutralise” PRC export subsidies and advance the comparative leadership of the United States with respect to the PRC.
EXIM also supports U.S. innovation, employment, and technological standards through direct exports in ten industries key to America’s prosperity and security. These include 5G, artificial intelligence, biomedical sciences, and financial technology.
Already, EXIM is displacing Chinese financing.
For instance, EXIM very recently approved two authorisations totaling $400 million in financing to support the export of U.S. goods and services to Petróleos Mexicanos (Pemex), Mexico's national oil-and-gas company. It is expected to support approximately 1,700 U.S. jobs with both large and small businesses.
We know China is interested in expanding its influence in North America because, during EXIM’s years of limited activity, China pursued closer ties with Pemex and subsequently closed its first transaction with the company and has another in the pipeline, notwithstanding its 76-year association with EXIM.
In May EXIM’s Board approved $4.7 billion in financing to support U.S. companies in their participation in the engineering and construction of an integrated liquefied natural gas project in Mozambique.
It reflects how companies and governments planning major construction want to veer away from proposed deals with Beijing and Moscow. In this case, as soon as they knew EXIM was reopening, Chinese and Russian entities were dropped as senior lenders. This was one of the largest transactions in EXIM’s history. It will support 16,700 American jobs across 68 suppliers in eight states.
EXIM stopped another competitive threat from China this year with $91.5 million in loan guarantee financing for U.S. exports of design engineering and construction services to Senegal, which was the first African country to sign up for China’s One Belt One Road initiative.
Some 78 percent of Senegal’s bilateral debt is to China. EXIM’s transaction helped Illinois-based Weldy-Lamont prevail over foreign competitors, including one from China. Instead, 500 American workers will help bring electricity to approximately 330,000 Senegalese in more than 400 villages.
Under President Trump, the reauthorised EXIM will help our nation recover from a pandemic from China by thwarting economic aggression from China.
Levelling the playing field for American exporters will strengthen and grow American businesses of all sizes, create American jobs, and keep America strong.
Kimberly Reed is President and Chairman of the Board of Directors of the Export-Import Bank of the United States. She is the first woman and first West Virginian to lead the agency.
Ambassador Robert O’Brien is the 28th United States National Security Advisor.
EXIM is an independent federal agency that promotes and supports American jobs by providing competitive and necessary export credit to support sales of U.S. goods and services to international buyers. A robust EXIM can level the global playing field for U.S. exporters when they compete against foreign companies that receive support from their governments. EXIM also contributes to U.S. economic growth by helping to create and sustain hundreds of thousands of jobs in exporting businesses and their supply chains across the United States. In recent years, approximately 90 percent of the total number of the agency’s authorisations has directly supported small businesses. Since 1992, EXIM has generated more than $9 billion for the U.S. Treasury for repayment of U.S. debt.
Source: Press Release Office of Communications (202-565-3206) Date: October 19, 2020