Chinese Financiers

Chinese banks have emerged as a major financier over the past few years, lending more money to developing countries than the World Bank, to support Chinese exports and businesses overseas. According to research conducted by the Financial Times newspaper, China Export Import Bank (China Exim Bank) and China Development Bank signed loans of at least $110 billion to other developing country governments and companies in 2009 and 2010 compared with the World Bank's lending arms made loan which made commitments of $100.3 billion from mid-2008 to mid-2010.

China Export Import Bank (China Exim Bank) and China Development Bank are two policy-oriented financial institutions of the Chinese government. Like all contemporary exim banks around the world, China Exim Bank's mission is to provide policy oriented financial support for the export/import of capital goods, however, what makes China Exim Bank unique is that it is under the direct leadership of China's State Council and subject to the direct and supervision of the Ministry of Finance, the Ministry of Foreign Trade and Economic Cooperation and the People's Bank of China. It's services include export credits, guarantees and concessional loans. The latter is an important part of Chinese government aid to foreign countries. China Exim Bank funds most of China's overseas dams. Through the use of concessional loans, China Exim Bank has financed dams in Africa (Mepanda Nkuwa - Mozambique, Merowe - Sudan), Latin America (Coca Coda Sinclair - Ecuador) and Southeast Asia (Kamchay - Cambodia, Yeywa - Burma).

Other state-owned and partially private banks have been involved in dam building overseas. The Bank of China has been involved in dam building in Ecuador and Nepal. The Industrial and Commercial Bank of China provided an export credit loan to support a Chinese turbine producer, Dongfang Electric, to supply and install turbines as part of the Gibe III Project in Ethiopia which will potentially devastate downstream communities in Kenya.

Environmental and social policies guiding the investment decisions of Chinese financiers are weak and implementation capacity is even weaker. While China Exim Bank has disclosed it's environmental policy guidelines, other Chinese banks have not disclosed their environmental policies and have yet to make clear what standards (if any) they adopt when considering loan proposals for overseas dam projects.

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Environmental Record of Chinese Banks 2010 benchmarks 14 Chinese commercial banks, including ICBC, China Construction Bank and Bank of China, which are currently some of the biggest banks in the world. The report assesses each bank based on indicators such as its environmental policies, implementation measures, lending reductions to energy-intensive and polluting sectors, lending to environmentally friendly projects, information disclosure and receptivity to public criticism. Noting that Chinese financiers are expanding their portfolios abroad, the study also looked at the banks' transparency about their overseas lending.