On the 21st, China Export & Credit Insurance Corporation released a report ranking the risk levels of 192 sovereign nations, marking the first time that countries involved in the Belt and Road Initiative have been included.

On August 21, the China Export & Credit Insurance Corporation (hereinafter referred to as Sinosure) released the 2015 edition of its “Country Risk Analysis Report” and the reference credit ratings for sovereign risks of 192 countries worldwide in Beijing. Among these, the reference credit ratings for 33 countries were revised. Additionally, Sinosure prepared—for the first time— a country risk analysis report focusing on countries along the Belt and Road Initiative.

It is reported that this marks the 11th consecutive year that China Export & Credit Insurance Corporation has released the “Country Risk Analysis Report.” Meanwhile, based on the country risk assessment model independently developed by China Export & Credit Insurance Corporation, the 2015 edition of the report provides reference ratings for country risks across 192 sovereign nations worldwide. By releasing the “Global Risk Map” and the Global Risk Globe, the report vividly and clearly presents a comprehensive and detailed panorama of global risks.

Compared to the 2014 ratings, in 2015, 14 countries saw their country risk levels decline and their reference ratings upgraded, accounting for 7.3%; 159 countries maintained stable country risk levels and unchanged reference ratings, representing 82.8%; and 19 countries experienced an increase in country risk levels accompanied by a downgrade of their reference ratings, accounting for 9.9%. Judging from the adjustment results, the countries whose ratings were upgraded mainly included India, Indonesia, Mexico, and Tanzania—countries that have seen relatively smooth domestic structural reforms and promising economic growth prospects. On the other hand, the countries whose ratings were downgraded primarily included hot-spot nations such as Ukraine and Yemen, which have been severely impacted by geopolitical tensions, as well as countries like Angola, which have been significantly affected by the decline in international crude oil prices. China Export & Credit Insurance Corporation summarizes the global country risk characteristics for 2015 as follows: Geopolitical conflicts in hotspot regions are intensifying; the global economy is entering a “new normal” characterized by an uneven and moderate recovery; momentum for reforming the international financial order continues to grow; and monetary policy divergence among major economies is deepening.

In the first seven months, China Export & Credit Insurance Corporation (Sinosure) insured transactions totaling 33.28 billion U.S. dollars in North America. From the perspective of business performance: China Export & Credit Insurance Corporation (SINOSURE) maintains an overall controllable level of business risk in the North American region, and its country-specific business quality is relatively high. Among these, the United States has long been China’s largest single market for short-term credit insurance coverage. In the future, uncertainty surrounding adjustments to U.S. economic policies is expected to be a significant risk factor.

In the first seven months, China Export & Credit Insurance Corporation (SINOSURE) insured an amount of 32.64 billion U.S. dollars in the European region. From a business perspective, Risk levels vary considerably among European countries. The regional risk profile is characterized as follows: First, Western European countries have well-established market economies, sound legal and regulatory frameworks, and generally low political risks. However, their economic recovery remains relatively slow, and these countries face adverse factors such as uneven development and industrial hollowing-out. Particularly noteworthy is the Greek debt crisis, which has become a major risk affecting the European economy. Although the Greek debt crisis was temporarily eased in July, the underlying issue of Greece’s excessively high debt has yet to be fundamentally resolved. Second, most Central and Eastern European countries are export-oriented economies, with their economic development closely tied to export levels. The foundation for sustained economic growth remains fragile, making their overall economies highly vulnerable to external factors. Currently, the downturn in Russia’s economy is also weighing on the economic development of the Central and Eastern European region.

Asia is the region with the largest scale and most concentrated insurance liabilities for China's export credit insurance business. It is also the primary coverage area of the Belt and Road Initiative. In the first seven months, China Export & Credit Insurance Corporation (Sinosure) insured amounts in Asia totaled 85.68 billion U.S. dollars, representing a year-on-year increase of 14.1%. Risks in the Asian region are characterized by multiple layers, diversification, and increasing complexity. First, economic growth in Asia’s export-oriented economies and countries heavily reliant on oil and gas exports has generally come under pressure. Second, in recent years, China has stepped up its investment in infrastructure development in Southeast and South Asian countries, particularly in sectors such as power, telecommunications, transportation, energy, and shipbuilding, which have experienced relatively rapid growth. As a result, issues related to country concentration and industry concentration have become apparent. Third, political situations in many Asian countries have undergone changes; in some South Asian nations, changes in government have led to shifts in foreign policy, introducing potential political risks in project implementation. Meanwhile, the situation in West Asia remains volatile, with intricate social conflicts and prolonged instability in several countries, creating a long-term stalemate. Moreover, regional disputes are increasingly likely to spark friction and conflicts, further complicating relations among relevant countries. All these risks have had negative impacts on Chinese enterprises’ foreign trade and investment activities.

Africa is a region where China Export & Credit Insurance Corporation has historically concentrated its medium- and long-term business operations. In the first seven months of 2015, China Export & Credit Insurance Corporation (Sinosure) insured transactions in Africa totaling US$11.2 billion. Overall, Chinese enterprises have shown an increasingly strong willingness to invest in Africa. However, due to the sharp drop in international crude oil prices, risks have risen for energy-exporting countries in Africa. In particular, in West Africa, the accelerating depreciation of local currencies has made it significantly more difficult for buyers to obtain U.S. dollars in the foreign exchange market to make overseas payments. On the political front, the region suffers from poor political and economic stability, with frequent conflicts in some countries and a lack of stable governance structures that can be established in the short term. Economically, Africa’s economic development remains relatively underdeveloped; most countries have single-sector economies, making their ability to meet external payment obligations highly vulnerable to fluctuations in the global environment. Moreover, poorly developed infrastructure severely hampers their efficiency in attracting foreign investment.

China Export & Credit Insurance Corporation is experiencing rapid growth in its business in Latin America. In the first seven months of 2015, China Export & Credit Insurance Corporation (Sinosure) insured transactions in Latin America totaling US$22.5 billion, representing a year-on-year increase of 26.4%. Overall, over the past decade, major emerging economies in Latin America—such as Brazil, Argentina, Chile, and Venezuela—have vigorously developed their domestic economies and achieved remarkable results. However, in recent years, the decline in commodity prices has led to a slowdown in economic growth in some Latin American countries. At the same time, deeper structural issues—such as a single economic structure and weak financing capabilities—have gradually become more apparent. Currently, several Latin American countries are experiencing high inflation and accelerating capital outflows, resulting in a sustained deterioration of the regional economy. Recently, exchange rates in many Latin American countries have been undergoing significant fluctuations, and foreign exchange controls could potentially intensify further.

Currently, China is at an important juncture of opportunity in the implementation of the Belt and Road Initiative. Mr. Paul Xu, General Manager of China Export & Credit Insurance Corporation (SINOSURE), pointed out that, given the still-significant political and economic risks on the international stage, SINOSURE must focus its efforts on three key areas to provide robust support and protection for the construction of the Belt and Road Initiative: First, taking the Belt and Road Initiative as the main thread, we must strengthen credit risk safeguards; risk reporting is a crucial component of this effort. Second, we need to accurately grasp the credit risk landscape of the Belt and Road Initiative, conduct thorough research and analysis, precisely identify risks, and proactively implement preventive measures. Finally, we should actively establish a credit risk protection mechanism for the Belt and Road Initiative, guided by the principles of professionalism, policy orientation, informationization, and internationalization, thereby serving effectively as a “protective umbrella” for credit and a “medical team” for risk management.

Luo Xi stated that China Export & Credit Insurance Corporation will always keep in mind its mission of "fulfilling policy-oriented functions and serving the open economy," fully leveraging its policy-oriented capabilities, continuously strengthening its professional risk management expertise, and proactively building an overseas economic security network for our country amid the intricate and complex global political and economic landscape. We will continue to provide strong support for the Belt and Road Initiative, work hand-in-hand with Chinese enterprises from all sectors, and make new contributions to the establishment of a new system for China’s open economy.