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HSBC Boosts International Loan Program to $5B

HSBC Boosts International Loan Program to $5B

New York, NYHSBC Bank USA is adding $3 billion more to its international loan program, raising the program’s total funding to $5 billion, as “the demand by US small and medium size businesses looking to export or expand internationally continues to rise.”

The funding increase is the third in 15 months and will “satisfy the demand by companies who want financing to grow and compete,” said Steve Bottomley, group general manager, senior executive vice president and head of Commercial Banking for HSBC in North America.

In 2013, US exports hit an all-time record of $2.3 trillion and supported 11.3 million US jobs, directly and indirectly, according to data supplied by the US International Trade Administration.

The latest HSBC Global Connections Trade report shows that developing economies, such as China and India, present the best US trade prospects, with US export growth to average nine percent a year to each country through 2030.

Additionally, global trade is expected to grow annually by eight percent beginning in 2016 from 2.5 percent in 2013, as businesses capitalize on the rise of the emerging market consumer and developing markets stabilize their productivity levels for the future.

“US small- and medium-size businesses are key contributors to US exports and domestic job growth,” said Derrick Ragland, HSBC executive vice president and head of US Middle Market Corporate Banking.

HSBC launched its international loan program for US small and medium size businesses seeking to export or expand internationally in July 2013with $1 billion in funding.

It doubled the program to $2 billion at the start of 2014, and today’s addition of $3 billion more raises the program’s total funding to $5 billion.

The international loan program is available to businesses with at least $3 million to $500 million in annual revenue, and who are focused on cross border trading or global expansion.

Only applications for new business loans will be accepted and all of HSBC’s usual credit and lending criteria apply. The program runs through December 2015.

International trade and financing, said Bottomley, “is critical not only for U.S. companies who want to excel, but also for the wider US economy.”

Since launching the program last year, “We’ve been impressed by the pace with which businesses around the country and across industries have taken advantage of the program to capture international growth market opportunities.”

10/09/2014

New HSBC Report Urges Pro-Trade Policies

New York, NY – Though the US “continues to confront a competitiveness challenge of too few quality jobs and too little income growth, there is a future in which America can create millions of good jobs connected to the world via international trade and investment,” according to “Made in America – Made for Trade,” a new report released by HSBC.

Reaching that future, though, “will require US policies that are based on a sound understanding of how American companies succeed in today’s dynamic global economy, and of the critical role that trade finance plays in that success,” writes the report’s author, Prof. Matthew Slaughter of the Tuck School of Business at Dartmouth College.

The US, he concludes, could boost productivity and revitalize the economy in the next decade if the country “pursues an expansive and connected set of pro-trade policies in the areas of international trade, investment, immigration, tax, and the social safety net.”

The report’s major points:

* In absolute dollars, US exports have more than doubled from$1.04 trillion in 2003 to $2.26 trillion in 2013. “The net result has been a commensurate surge in how important exports are to the total US economy.”

* In the past three years, exports as a share of US GDP reached about 13.5 percent; the highest share since at least 1947.

* Exporters and importers “are more capital-intensive, more productive, and pay higher wages – about 15-20 percent higher for companies that trade and about 25-30 percent higher for multinational companies.”

* The tally of US companies that export has risen steadily in recent years, reaching a record 304,867 in 2012. Small and medium-sized companies – those that employ 500 workers or fewer – accounted for over 97.7 percent of this total count, at nearly 298,000.

* International trade “has boosted annual US income by at least 10 percentage points of GDP relative to what it would have been absent this global engagement. That translates into an immense aggregate gain in 2013 of at least $1.7 trillion, an average gain of over $13,600 per US household per year.”

* An aggressive pro-trade policy initiative could create, over the next decade, about 10 million new high-paying trade-connected jobs in America: one million per year or about 100,000 per month. This is indeed an aggressive goal. But it is also one that is no doubt attainable.

The HSBC Made for Trade report was crafted as an on-tour “national conversation” with leaders in business, government, industry and academia in four US cities whose economies have been shaped by global trade holding discussions on the role of global trade in today’s economy.

The national tour looks at the contribution of international flow of goods, services and capital to the US economy, and the opportunities for American businesses brought about by global trade.

10/02/2014

‘Emerging Markets’ Attracting US Exporters: Report

New York, NY – US businesses are increasingly looking to emerging markets for export growth in both the short and long term, according to the latest HSBC Global Connections Trade Forecast.

Even though US exports are expected to grow by about six percent per year through 2030 and advanced economies will continue to play a dominant role in US trade, the forecast predicts that China and India “present the best trade prospects, with US export growth to average nine percent a year to each country through 2030.”

Additionally, the report said, thirty percent of US business leaders participating in the HSBC Trade Confidence Index Survey (TCI) identified Asia, especially China and India, as the most promising region for business expansion in the next six months, while a quarter favored Latin America, especially Mexico and Brazil.

US Export and Import Forecast

US TCI dipped to 110 from 115 and lower than the global average of 116,” though still well above the neutral benchmark of 100 indicating that the outlook for trade continues to improve although at a slower pace than previously,” the report said.

Sixty percent of US business leaders in the TCI survey expect trade flows to increase, down from 66 percent six months earlier.

Industrial machinery and transport equipment are the key industries driving US export expansion now and into the future, while the top export destinations for the US over the medium term will continue to be Canada, Mexico and China.

However, the report said, Korea and Brazil will displace the slower growing economies of Germany and Japan over the long term to complete the top five US export markets.

Respondents said the biggest areas of opportunity in Asia in the short term are in construction and manufacturing, while in Latin America they are in wholesale and retail.

On the import side, Transport equipment and information, communications and technology equipment will continue to drive US imports.

China, India and Vietnam will be the fastest growing suppliers of US imports. Imports from China will grow by an average of seven percent through 2020, accounting for about one-fifth of all US imports.

The index is an international survey of 5,500 small and middle market businesses engaged in cross-border trade including around 250 in the US.

“Despite near term challenges, there are clearly significant export opportunities in emerging markets and the good news is US businesses are well positioned to take advantage of them, especially as global trade picks up.” said Steve Bottomley, HSBC group general manager, senior executive vice president and head of commercial banking for HSBC in North America.

“A highly educated workforce, well-developed production processes, and innovative technology will help US businesses plug into increased trade flows, while the rise of the emerging market consumer is helping to lift demand,” he said.

US Pharmaceutical and Energy Growth

One US sector that is set to benefit from the increased demand from emerging markets consumers is pharmaceuticals. US pharmaceutical exports are expected to grow by nearly eight percent a year through 2030, outpacing overall export growth for the same period.

This will help the US overtake Germany as the leading exporter of pharmaceutical products by 2030 amongst the 25 countries included in the report.

“Rising global demand for better healthcare, especially in emerging markets, is expected to trigger increased spending on healthcare over the next several years,” said Derrick Ragland, executive vice president and head of US middle market corporate banking, HSBC Bank USA.

“As a global innovator in pharmaceuticals and biologicals, US companies should find it easier to expand into or enter new markets.”

Still, the report notes that healthcare reform and an aging population will drive the US trade deficit for pharmaceuticals goods higher through 2030.

Additionally, to remain competitive, US pharmaceutical companies will need to invest in research and design to promote innovation especially as access to increased supplies of generic products from abroad rises and US patents on many major brand products expire.

Emerging markets, the forecast said, will also be a key focus for US energy trade.

“Rapidly rising production of unconventional oil and gas products domestically will help lift US energy exports by about five percent per year through 2030, while petroleum imports will fall from 12 percent in the near term to seven percent in the long term,” it said.

“Emerging markets that don’t have refining capabilities or don’t dispose of energy reserves could represent a major opportunity for US energy exporters,” said Ragland.

Overall Global Outlook

Globally, trade is expected to grow annually by eight percent beginning in 2016 from 2.5 percent in 2013.

Over the longer term, the forecast shows that global merchandise trade will more than triple by 2030 from 2013 levels, as businesses capitalize on the rise of the emerging market consumer and developing markets stabilize their productivity levels for the future.

The HSBC Trade Forecast, modeled by Oxford Economics, forecasts bilateral trade for total exports/imports of goods, based on HSBC’s own analysis and forecasts of the world economy to generate a full bilateral set of trade flows for total imports and exports of goods, and balances between 180 pairs of countries.

The HSBC Trade Confidence Index covers a total of 23 markets and is the largest trade confidence survey globally. The current survey comprises six-month views of 5550 exporters, importers and traders from small and mid-market enterprises on: trade volumes, risk to suppliers, need and access to trade finance, impact of exchange rates and regulation.

09/16/2014