Although China has become a major trade power in the world, there are many shortcomings in the Chinese trade support systems including Chinese trade insurance system. Therefore, how to improve the Chinese trade insurance system has become a hot issue nowadays. In some of the latest studies, a method of privatization of trade insurance companies has been proposed. Up to now, there are three biggest privatized trade insurance companies in the world. They are Euler Hermes in Germany, Atradius in Netherlands, and COFACE in France. In this paper, necessary conditions for trade insurance privatization are examined according to the experiences of three privatized trade insurance companies: Euler Hermes (Germany), Atradius (Netherlands) and COFACE (France). These privatization requirements are then compared with trade insurance companies in China, in particular, whether Chinese trade insurance companies possess the necessary requirements for privatization or not. Consequently, we answer the question as to whether privatization is the right way to improve the Chinese trade insurance system in this study.
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