EKF’s risk assessment when exporting to China

Country risk classification

The risk classification reflects the risk that a buyer cannot pay due to political risks in the country. The higher the figure, the higher the risk.



EKF's cover policy


Credit period
Guarantees without credit period Up to 1 year 1-5 years More than 5 years
Public buyer EKF accepts guarantees from the Ministry of Finance. EKF considers cover of other public buyers on a case-by-case basis.
Private buyer EKF accepts all creditworthy buyers. EKF accepts rather strong buyers with a credit rating equivalent to minimum BB-
Bank EKF accepts creditworthy banks.

EKF may approve transactions below DKK 25 million based on a case-by-case assessment regardless of other conditions applying to the country.

Financing through bills of exchange: Not considered - Contact EKF

Guarantees in local currency: Approved for transactions up to DKK 25 mill. in CNY and CNH. For larger transactions contact EKF.


Denmark's exports to China have increased significantly in recent years, and China is now Denmark's largest export market in Asia. For EKF, China is one of its medium-sized markets in Asia, with EKF commitments totalling approx. DKK 0.5bn. A significant share of these commitments is made up of the Danish government's Mixed Credits (Danish International Development Agency – DANIDA – assistance programme of zero or low-interest loans).
China is a single-party state with limited organisational freedom and restrictions on freedom of speech. In the medium term, China's political system is regarded as stable. However, local social unrest is predicted as a result of factors such as social inequality, environmental problems and civil/worker rights violations by authorities and employers. Any unrest of this kind is not, however, expected to escalate into national protest movements or nationwide riots.
The Chinese growth package during the global financial crisis was officially DKK 600 billion, and was a contributory factor in moderating the ensuing decline in GDP growth. Sustained high economic growth is anticipated, with continued high surpluses in the balance of payments. China has vast currency reserves, and the country is expected to remain willing and able to service the government's external debts. There is some uncertainty surrounding the indebtedness and debt-servicing capacity of local authorities and companies co-owned by the state. The country's economic challenges include realignment towards a more domestically driven economy; the continued pressure to revalue the currency; increasing reliance on imports of raw materials and the transition to more intensive, knowledge-based production. From a political perspective, there is also great focus on the risk of the economy overheating, including caps on inflation and the liquidity of the banks.
The commercial climate is complicated. The problems stem from factors such as corruption and expropriations compounded by a complex legal system. The risk of expropriation in connection with foreign investments is, however, assessed as being low.
EKF anticipates increased requests for services to cover China, where investment guarantees may be in demand as a result of the complicated commercial climate.

General assumptions for EKF's risk assessments
This information constitutes EKF’s guideline country cover policy at publishing date. The policy is not binding for EKF regarding specific applications for export credit guarantees. Before any commitment is made based on the country cover policy, we recommend contacting EKF for further advice.

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Peter Toft

For more information on the country

Contact EKF’s country and bank analyst:
Peter Toft
+45 35 46 26 53

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