Program on China and Transformational Exports

Strategic Context

As noted in the National Security Strategy of the United States of America, China challenges American power, influence, and interests, attempting to erode American security and prosperity. China’s infrastructure investments and trade strategies reinforce its geopolitical aspirations.

Program Vision

To keep America strong by empowering U.S. businesses and workers to compete successfully against entities backed by the People’s Republic of China (PRC).

EXIM Mission: Support American Jobs by Facilitating U.S. Exports

EXIM Vision:  Keeping America Strong: Empowering U.S. Businesses and Workers to Compete Globally

Competitive Landscape

As noted in the EXIM Competitiveness Report [link], worldwide, there are presently 115 known official export credit providers, including export credit agencies (ECAs) such as EXIM – up from 85 only four years earlier – a 35 percent increase from 2015 to 2019.  Foreign ECAs have become increasingly proactive, innovative, and flexible to best support their exporters, including small businesses facing foreign competition globally.

Within that environment, the People’s Republic of China far and away engages in the most aggressive and expansive export credit activity.  From 2015 to 2019, China’s official medium- and long-term (MLT) export credit activity alone was at least equal to 90 percent of that provided by all G7 countries combined.  By a conservative estimate, China’s official MLT export and trade-related financing totaled at least $76 billion in 2019. An exact figure is impossible to come by given the opacity of Chinese official financing.

Program Overview

EXIM is an independent federal agency that promotes and supports American jobs by providing competitive and necessary export credit for the sale of U.S. goods and services to international buyers. EXIM helps level the playing field for U.S. exporters, enabling them to compete in a global marketplace, and contributing to the economic and national security of the United States.

EXIM’s historic seven-year reauthorization (P.L. 116-94), signed into law by President Trump on December 20, 2019, directs EXIM to establish a “Program on China and Transformational Exports” (see Sec. 402). In a recent event hosted by the Center for Strategic and International Studies, EXIM Chairman Kimberly A. Reed called the program “one of the most significant initiatives in EXIM’s 86-year history.” (full remarks here.)

The Program’s purpose is to support the extension of loans, guarantees, and insurance, at rates and on terms and other conditions, to the extent practicable, that are fully competitive with rates, terms, and other conditions established by the People’s Republic of China or by other covered countries (as designated by the Secretary of the Treasury). The law charges EXIM with a goal of reserving not less than 20 percent of the agency’s total financing authority (i.e., $27 billion out of a total of $135 billion) for support made pursuant to the program.

EXIM is actively working to establish the program, which has two aims:

• To directly neutralize export subsidies for competing goods and services financed by official export credit, tied aid, or blended financing provided by China or by other covered countries.
• To advance the comparative leadership of the United States with respect to China, or support United States innovation, employment, and technological standards, through direct exports in ten transformational export categories, specifically:
• Artificial intelligence.
• Biotechnology.
• Biomedical sciences.
• Wireless communications equipment (including 5G or subsequent wireless technologies).
• Quantum computing.
• Renewable energy, energy efficiency, and energy storage.
• Semiconductor and semiconductor machinery manufacturing.
• Emerging financial technologies (including technologies that facilitate financial inclusion through increased access to capital and financial services; data security and privacy; payments, the transfer of funds, and associated messaging services; and efforts to combat money laundering and the financing of terrorism).
• Water treatment and sanitation (including technologies and infrastructure to reduce contaminants and improve water quality).
• High-performance computing.
• Associated services necessary for use of any of the foregoing exports.

“The EXIM Subcommittee on Strategic Competition with the People’s Republic of China – or the Chairman’s Council on China Competition – provides guidance to EXIM’s Advisory Committee on how China is engaging in strategic competition against the United States, how Beijing’s actions impact American interests and economic security, and how EXIM can make the most of its critical, bipartisan mandate to establish a Program on China and Transformational Exports.”

For questions or more information as EXIM implements this program, please direct inquiries to china.program@exim.gov.

Panel Discussion: Strategic Competition with China, and How U.S. Businesses Can Compete and Win

Moderator:
David Trulio, Counselor to the Chairman & Senior Vice President for the Program on China and Transformational Exports, EXIM
Panelists:
U.S. Congressman Andy Barr (KY-6)
U.S. Congressman Anthony Gonzalez (OH-16)
U.S. Congressman Michael McCaul (TX-10)

Strengthening American Competitiveness

In May, EXIM launched its “Strengthening American Competitiveness” initiative, a highly productive and informative series of engagements with over 1,000 exporters and stakeholders in these transformational export sectors key to long-term U.S. prosperity and security. The insights and feedback from this initiative have played a crucial role in ensuring EXIM’s Program on China and Transformational Exports is optimally positioned to support American jobs by facilitating U.S. exports.