Razorpay Payment Gateway: China ECIC Again "Solves" Global Country Risks

The current global risk landscape is characterised by high geopolitical risk, with important elections in large countries such as the United States, France and India having a profound impact on the global stage. Political instability in countries such as Bangladesh, Thailand and Bolivia, as well as ongoing crises in Ukraine and the Middle East, have created uncertainty about global political stability.

At the same time, the global economic recovery has shown resilience, with international trade gradually picking up as demand recovers from its 2023 trough. Inflationary pressures have eased and monetary policies have diverged across economies, maintaining the momentum of slow growth in the world economy. However, fiscal space for developing countries became more constrained. The global debt burden and interest costs rose in an environment of high interest rates, leading to financial stress in more than half of the developing countries. This has led to stagnation and even regression in the implementation of the 2030 Agenda for Sustainable Development. Competition in new energy supply chains has intensified, with some countries erecting green trade barriers and placing greater scrutiny on key resources. Disputes over technology, resources and rules in the new energy sector are gradually becoming the focus of strategic competition among major powers. The China Export and Credit Insurance Corporation (SINOSURE) recently released its 2024 Country Risk Analysis Report in Beijing, providing an authoritative assessment of the current global risk situation.

This year marks the 20th anniversary of China Export and Credit Insurance Corporation (CECIC)'s country risk report to the public. The report is divided into two volumes: "Country Risk Analysis Report 2024 - 41 Key Country Risk Analyses" and "Country Risk Analysis Report 2024 - Global Investment Risk, Industry Risk and Corporate Insolvency Risk Analyses". -Analysis of Global Investment Risks, Industry Risks and Corporate Insolvency Risks." According to the report, global country risk is generally stable and changing in 2024, with eight countries experiencing an increase in risk levels and seventeen countries experiencing a decrease. Sovereign credit risk ratings are relatively stable, with one country's risk level increasing, two countries decreasing, and one country exiting debt default (CE) status.

Song Shuguang, Chairman of China Export & Credit Insurance Corporation (CECIC), said that as a policy-oriented financial institution focusing on risk management, SINOSURE endeavours to enhance its risk research and management capabilities. Using an improved risk information data platform and unique country risk analysis techniques, SINOSURE promotes the application of the "Belt and Road" debt sustainability analysis framework and strives to build a country risk and sovereign credit risk assessment system with Chinese characteristics. The report provides timely risk assessment, early warning, management and consulting services to help enterprises strengthen their overseas security capabilities. This year's report analyses the pillars of a country's economic growth from an industrial perspective, demonstrates the country's risk exposure from a risk perspective covering the political, economic, legal and business environments, analyses economic trends from a data perspective, focuses on the fiscal and balance of payments, external debt, exchange rate and employment, and provides policy recommendations for China's enterprises to go global based on the opportunities brought by resource endowments, policy environment and international relations. It also provides policy recommendations for Chinese enterprises to "go global" based on resource endowment, policy environment and opportunities arising from international relations.

The report provides a detailed analysis of risks in key global regions. Asia remains the region with the highest concentration of global hotspots, with rising political risks due to political changes in Bangladesh, political unrest in Thailand, provocative behaviour by the Philippines in the South China Sea, and the ongoing conflict between Israel and Palestine. Economically, Asia maintains significant potential for economic development as a major export and investment destination for Chinese companies, with abundant natural resources and diverse industrial structures.

In Europe, the level of regional political risk has risen due to the crisis in Ukraine and the rise of right-wing forces in some countries. Economically, the macroeconomic situation in Europe is expected to improve in 2024. The new energy sector is expected to become a new growth area as the green transition accelerates and strict carbon emission control policies are in place.

In Africa, although political volatility in countries such as Mali and the Sudan led to a temporary rise in political instability, the overall impact was limited. With regard to sovereign debt treatment, negotiations between defaulting countries and major creditors are progressing well and prospects for debt restructuring are favourable. In addition, countries such as Nigeria and Egypt have managed to contain the depreciation of their local currencies, and economic conditions have improved relatively.

In North America, the level of political risk has remained stable since 2024 and economic growth rates are among the highest in the developed world. However, increased competition between the US and China, coupled with the upcoming elections in the US, significantly increases the risk of policy changes. Going forward, attention should be paid to possible restrictive measures against China in the United States and the risk of policy changes for Chinese companies.

Overall risks in Latin America rose owing to political disputes in Bolivia and Venezuela, as well as economic turmoil and currency devaluations in Argentina and Brazil. The alternation of left- and right-wing parties in power in many Latin American countries has also led to high policy uncertainty.

Looking ahead, the trend of world multipolarity will not change, and the global political landscape is expected to usher in new changes. World economic growth still faces multiple pressures, and there is an urgent need for more effective governance mechanisms to address global debt pressures, as highlighted by Sheng Hetai, General Manager of the China Export and Credit Insurance Corporation.

At present, new challenges have emerged in both the internal and external environments. Governments, enterprises and financial institutions should work together to address these challenges. To this end, SINOSURE puts forward the following policy recommendations: strengthening the response to security risks related to geopolitics and great power competition; seizing the opportunities presented by emerging technologies while guarding against related risks; strengthening debt risk early warning and participation in international debt governance; and rationally applying export credit insurance to prevent and mitigate risks.

According to statistics, in the first nine months of this year, SINOSURE has realised a cumulative insurance amount of USD 75.57 billion; paid USD 1.58 billion in claims to enterprises; and served 222,000 enterprises, a year-on-year increase of 12%, fully demonstrating its policy role and playing a positive role in counter-cyclical and cross-cyclical regulation.