The bank is a policy bank and along with other Chinese policy institutions like China Development Bank and Sinosure implement the economic policies of the government. The focus of the bank is to promote foreign trade and investment. Commercial lending forms the backbone of the bank. Commercial activity includes export credits mainly in the infrastructure fields and investment loans for Chinese businesses to establish overseas in the energy, mining and industrial sectors. Another function is to administer concessional loans which are no interest or very low interest loans provided as foreign aid by the Chinese government. Exim is the sole provider of Chinese government concessional loans. Exim does not publish figures for overseas loans. However, U.S. officials estimate that it finances more than the total export financing of the Group of Seven industrialized nations combined. The Financial Times estimates that in 2009 and 2010, China Eximbank and China Development Bank together signed loans of at least $110 billion to other developing country governments and companies, more than the World Bank over a similar period. Rival export financing institutions that have seen a decline in influence, such as the U.S. Export–Import Bank through Chairman Fred Hochberg, have complained that Exim of China doesn't follow the export financing guidelines promulgated by the OECD and so has an unfair advantage.
Foreign aid
The bank is a part of the Chinese foreign aid system and administers the Two Preferential Loan Program. The concessional loan and preferential export buyer's credit are the two main loan products under the preferential loan program. For concessional loans the bank advances a no interest or very low interest rate loan to a developing country government or agency to build a project. The term of the concession loan is up to 20 years and a maximum grace period of 7 years is given. The preferential export buyer's credit is provided to a foreign borrower to purchase Chinese goods or services. Like the concessional loan, this type of loan is also subsidized by the Chinese government. Interest rates are below market rates at around 3 to 6%. However, the preferential export buyer's credit is generally classified as a commercial loan rather than foreign aid even if the interest rate is very low because the purpose is to promote Chinese exports. These two types of loans are a major part of the financing support for China's Belt and Road Initiative.
