Hangzhou has seen rapid development of cross-border e-commence, market purchasing, overseas warehouses and other new formats of foreign trade in recent years. The frequent two-way fluctuation of RMB exchange rates as a result of the volatile global economic situation has posed a challenge to foreign trade enterprises.
Due to the limited capital and capacity in management coupled with the high cost and threshold for hedging exchange rate risk, some small-scale foreign trade enterprises have been vulnerable to risks. It is on such consideration that Zhejiang Provincial Government has funded and established Hangzhou Financing Guarantee Group Co., Ltd. to help foreign trade enterprises to hedge the risk of exchange rate and reduce losses from exchange to the maximum extent. In this way, the government enables enterprises with good credits to be exempted from guarantee fee, thus reducing their cost of capital and escorting them to do business overseas.