Recently, ICBC and China Export & Credit Insurance Corporation (SINOSURE) join hands to provide a trade finance service of RMB export factoring on an export/import deal between Shenzhen ZTE Corporation ("ZTE") and its trading partner in Indonesia. This deal which is the first RMB trade finance transaction in the world across countries, speaks of the beginning of such financing facility offered from a commercial bank. Industry insiders comment that RMB export factoring by Chinese commercial banks has many benefits: One is to relieve the bottleneck of RMB inadequacy faced by overseas buyers, a factor which constraints the healthy development of RMB trades across the borders. The other benefit is to protect Chinese export enterprises against risks of nonpayment by foreign buyers as well as fluctuations in exchange rates. Further, this is a major boost to help Chinese export industry to regain foothold and succeed further.
 
    
Factoring is a complete financial service offered under sales contracts and agreements during a trade. The supplier transfers or sells its accounts receivables to the bank in order to obtain financing. In this RMB export factoring transaction by ICBC, the bank bought ZTE's accounts receivables against the export of the company to its trading partner in Indonesia. In the process, ICBC service networks of domestic and overseas are working through a basket of services down to every detail to serve all the upstream and downstream companies in the sales chain, in which ICBC Shenzhen Branch lends support to ZTE in the design of a factoring solution and financing facility. At the same time ICBC Indonesia helps ZTE's trade partner in Indonesia in the conversion of RMB and cross-border remittance. The whole solution exemplifies its uniqueness. To domestic exporters, the solution meets their requirements of receiving most of the cash within days of sale, improvement in the efficiency of the use of funds and less financing cost. To the overseas buyers, the solution helps them to address RMB shortfall. The solution is an example of ICBC's excellence in the settlement of RMB cross-border trade and trade finance service.  
  
 
According to ICBC spokesperson, ICBC makes a strong commitment to put into practice the State's Decisions and deployment in stabilizing import and export. In this regard, ICBC provides strong financial support to the I/E trade of all foreign trade enterprises. Until the end of June, ICBC has a balance of international trade finance to RMB 81 billion, or an increase of RMB 32.8 billion from the beginning of the year. The percentage growth of 68.2% is the fastest in the field attained by ICBC among large banks in China since this year. Meanwhile, ICBC's cumulative total in international settlement is a staggering USD 307.2 billion during the first six months of 2009. Worthy of note is that since starting its pilot on RMB cross-border settlement and issuing the world first RMB letter of credit for trading across the border on July 3rd, ICBC has successfully completed 21 settlements of RMB cross-border trades totaled to RMB 42.15 million. The success is a concerted play of several factors: ICBC leads the market in RMB settlement and clearing service; the bank has a financial service network around the globe and top-of-the-range technology. ICBC is now sitting loftily all others in terms of market share.         

As related by the ICBC spokesperson, the bank's next step includes the enhancement on the global service network, innovation in RMB settlement products for cross-border trade and accelerated efforts in international settlement and trade finance. ICBC is a major force behind Chinese companies "To go out" and remains committed to offer ever better and comprehensive banking services to push forward the RMB cross-border settlement service and the healthy development of Chinese foreign trade industry.