Liang Zhidong, deputy general manager of Sinosure, said the product is being touted to back up the Chinese Government's strategies of encouraging domestic companies to go abroad and overseas companies to invest in China's western regions.

The product would be a big help for companies in fending off political risks and raising funds, he said.

The product insures companies against such events as confiscation, war, restrictions on foreign exchange and governments' breaches of faith.

Sinosure, China's first wholly State-owned policy insurer, can insure both China's overseas investments and overseas investments in China, guaranteeing either shares or loans.

Both Chinese companies and foreign-invested companies in China are entitled to participate in the program.

Liang said the product is especially helpful for Chinese companies that wish to go into countries in danger of financial or economic crises, civil wars, uproars, restrictions on foreign exchange or other political risks.

Companies opting to buy the product would be able to transfer losses caused by political risks, improve fund-raising and market-exploration capacities and use Sinosure's information and risk management services, Liang said.

Sinosure was established on December 18, 2001, based on the insurance departments of the People's Insurance Corporation of China and the China Export and Import Bank.

Up to now, Sinosure has helped two Chinese companies invest overseas with its investment insurance and is talking with dozens of other firms.

Liang said Sinosure has also signed co-operative agreements with the World Bank and the International Union of Credit and Investment Insurers (Berne Union) in order to provide guarantees for overseas investors going into China's west.

(China Daily January 3, 2003)