… On Competition With China
By Emmanuel Oluebube, Correspondent UK
Export-Import Bank of the United States (EXIM) President and Chairman Kimberly A. Reed has engaged (virtually) with the US House of Representatives China Task Force. The Task Force Members requested that Chairman Reed present on the role of EXIM and how the agency’s historic 2019 Congressional reauthorization can be used as a tool to counter China.
The China Task Force, which is chaired by US Rep. Michael McCaul (R-Texas), Lead Republican on the House Committee on Foreign Affairs, is focusing on five pillars that reflect the key aspects of the United States’ strategic competition with China—National Security, Technology, Economics and Energy, Competitiveness, and Ideological Competition—as it develops policies, ideas, and legislative strategies to combat the threat posed by the Chinese Communist Party.
“I am grateful to President Reed for briefing members of the China Task Force on the Export-Import Bank’s multi-pronged efforts to combat the Chinese Communist Party’s predatory practices that put American workers and companies at a disadvantage,” said Chairman McCaul. “Briefings, like this one by President Reed and her team, are important to the task force as we form our wide-ranging legislative recommendations to best address the CCP’s global malign activities.”
“The US Congress has a critical mission when it comes to competition with China, and I appreciate the opportunity to underscore EXIM’s unique and important role in keeping America strong–both through supporting US jobs and countering China’s opaque and exploitative practices—with the China Task Force,” said Chairman Reed. “Economic security is national security, and, because of the new Congressional mandate for EXIM to establish the Programme on China and Transformational Exports, our agency is now positioned to advance America’s comparative leadership with respect to China and put American businesses and workers in a stronger position for generations to come. I thank Chairman Michael McCaul and all of the China Task Force Members and look forward to working with them in the future to address the greatest challenge of our generation.”
“I want to thank Chairman Reed for her leadership at the Export-Import Bank and for taking the time to discuss with the China Task Force how we can better counter the Chinese Communist Party through the Bank,” added Rep. Anthony Gonzalez (R-Ohio), China Task Force Co-Chair for Economics and Energy. “The CCP represents one of the biggest existential threats facing our nation today, and as we begin to recalibrate our relationship, it is important that Congress provides the Export-Import Bank the ability to promote US companies in overseas markets to help bolster our economy and ensure continued US leadership on the world stage.”
During the discussion, Chairman Reed highlighted key aspects of the just-released EXIM Report to the US Congress on Global Export Competition. In particular, she underscored that China is using its two official export credit agencies, along with a number of other state entities such as state-owned banks and state-owned enterprises, to expand influence and gain competitive advantages. This strategy necessitates a robust and integrated US government response, and EXIM is a crucial element of statecraft in this regard.
The Competitiveness Report shows that China provided US$33.5 billion in official medium- and long-term (MLT) export credit—more than three times the amount of the next closest provider—in 2019. From 2015 to 2019, China’s official MLT export credit activity alone was at least equal to 90 per cent of that provided by all G7 countries combined. And, beyond its two official ECAs, China uses several other official government entities to finance its exports and trade practices through a variety of means, including export credits. By a conservative estimate, China’s official export and trade-related financing totaled at least US$76 billion in 2019. An exact figure is impossible to come by, given the opacity of Chinese official financing.
Reed also thanked the Members of Congress for EXIM’s historic reauthorization legislation, which was signed into law by President Trump on December 20, 2019. The law mandates the establishment of an EXIM “Programme on China and Transformational Exports,”—one of the agency’s most significant efforts in its 86-year history.
It also charges EXIM with a goal of reserving not less than 20 per cent of the agency’s total financing authority (i.e., US$27 billion out of a total of US$135 billion) to directly neutralize China’s export subsidies for competing Chinese goods and services and advance the comparative leadership of the United States with respect to China, and support U.S. innovation, employment, and technological standards globally in ten transformational export industries, including 5G, artificial intelligence, renewable energy, and semiconductors.