SunTrust Bank - Global Trade Solutions DID YOU KNOW ? … INTERESTING FACTS AND TRENDS IN THE WORLD OF GLOBAL TRADE South Carolina International Trade Conference Charleston May 27, 2008
Agenda Did you know? – Interesting Facts about Global Trade International Products & Service SCITC
Market Factors Driving Export Demand
Dollar Declines / Exports Rise
With the dollar declining by 21% since the beginning of 2006 and 14% since the beginning of 2007, exports are increasing at a faster rate than imports.
95% of the world’s consumers live outside the U.S.
International trade represented 40% of U.S. GDP growth in 2007
21% Dollar Decline since the beginning of 2006 Marginal decrease in the trade deficit has coincided with the USD decline. SCITC
A World of Change: Trends in Export Growth (in billions of dollars) U.S. Exports Exports – SunTrust Footprint (Southeast and Mid-Atlantic) Export Trends TradeStats Express™
Trade’s Impact on Small/Medium U.S. Companies
More than 700,000 U.S. jobs are supported by the $117 billion in manufactured exports
70% or more of the businesses involved in global trade are small or medium size.
95% of the world’s consumers live outside the U.S.
Jobs related to exports pay 13-18% higher than non-exporting
International trade gives the average U.S. household $9,000 more in spending power
97% of U.S. exports are from small to medium sized businesses
More than two-thirds of U.S. exporters have fewer than 20 employees
One in three acres of U.S. agricultural production is exported
The importance of exports to the U.S. economy
China: Challenge or Opportunity?
“ Over the past 15 years, bilateral trade in goods and services between the U.S. and China has increased by some 1200 percent. Over the past six alone, bilateral goods trade has nearly tripled and services trade has more than doubled.” (USTR)
“ China’s economy has grown by nearly ten percent a year for the past 20 years…US exports of manufactured goods, agricultural products, and services have grown an average of 23 percent a year since 2001.”(USTR)
U.S. factories account for more than 20 percent of the world’s added manufacturing value. By comparison, Chinese plants account for about 8 percent. (Cato Institute)
“ China is today our fourth largest export market, and the fastest growing export market for the U.S in the world” (USTR)
In 2006, the United States exported $55 billion in goods to China. Exports to China grew by 32% from 2005 to 2006, making it the fastest growing major market for U.S. products. (U.S. Chamber)
China's tariffs on goods of most interest to U.S. exporters have dropped from 25 percent in 1997 to 7 percent, thanks to its entry into the World Trade Organization. As a result, China has become a major market for American-made semiconductors, aircraft, chemicals, plastic materials, and other manufactured goods along with soybeans and cotton. Surging demand in China and other emerging markets is a main reason why American farmers and manufacturers are enjoying record output, sales, and profits.
Did You Know ?
U.S. exports to China could soon boom even more:
China will spend billions in months to come
Communication and power networks
Roads and infrastructure
Dams and water-treatment facilities
Factories, schools and houses
Many of the goods and services needed are not produced in China.
China is our 3 rd largest export market behind Canada and Mexico.
406 out of 435 Congressional Districts in the U.S. have seen triple-digit export growth to China from 2000 – 2007.
U.S. exports to China are growing 5X faster than any other export market.
This is less a function of the falling dollar and more of rising Chinese demand for U.S. products
Our mission is to help people and institutions prosper. SCITC
Did You Know ?
They need what we make…
Turbines and Telecommunications
Drugs and Medical Devices
Sewage and Sanitation Equipment
If a product requires modern technology and precise engineering, chances are, China needs it
China’s large currency reserves and strong demand allowed it to weather the Southeast Asia currency crisis in the 1990s.
More than a decade later, China has even more savings.
China will keep buying more from the U.S.
China couldn’t ask for a better time to buy American…
The falling U.S. dollar
The appreciation of the Chinese Yuan
Our vision is to be the bank of choice for businesses. SCITC
Did You Know ?
And, it’s not just China…
The world’s tallest building is in Taipei, and soon to be Dubai.
The largest publicly traded company is in Beijing.
The biggest refinery is being constructed in India.
The largest passenger airplane is built in Europe.
The largest investment fund on the planet is in Abu Dhabi.
The biggest movie industry in Bollywood, not Hollywood.
The largest ferris wheel is in Singapore.
The largest casino is in Macau, which overtook Las Vegas in gambling revenues.
The Mall of America, once the largest in the world, today doesn’t crack the top ten.
The facts reflect a seismic shift in power and attitudes
The opportunities are boundless for U.S. exporters to provide the products and services to meet this demand.
Our strategy is to deliver big bank capabilities with local delivery and response. SCITC
Did You Know ?
In 2006 and 2007, 124 countries grew their economies at over 4 percent a year
… That includes more than 30 countries in Africa
In a list of growing global companies, four companies EACH are from Brazil, Chile, Malaysia and South Africa.
At the military and political level, the U.S. is the world leader…
But…on the industrial, financial, social and cultural level…
the level of U.S. power is being challenged.
It is the rise of the rest of the world…
… that can lead to opportunity for the U.S.
SunTrust backs its relationships with nearly two centuries of commitment, leadership and trust. We know what it takes to grow a business. SCITC
International Products and Services - Risk Mitigation - Trade Finance
Products and Services Understanding our clients needs allows us to recommend the appropriate solution Global Trade Solutions Internet based systems for Letter of Credit processing • Foreign Currency Trading • International Wire initiation in USD and Foreign Currency • International Draft issuance Online Systems Spot Contracts • Forward Contracts • Options • Multi-Currency Accounts • Multi-Currency Investments • Multi-Currency Loans • Cross Currency Swaps • Canadian Lockbox Facility Currency Risk Management Short-term Export Financing for U.S. Exporters Medium-term Buyer Financing for Foreign Buyers of U.S. Products Banker’s Acceptance Financing and Forfaiting (note purchase facilities) Trade Finance Consulting Services • Referrals to Export Credit Insurance Providers • Interface with Ex-Im Bank and insurance providers to facilitate transactions Export Financing Programs Letters of Credit • Import • Export • Standby • Transferable Documentary Collections • Import • Export • Direct Training on Products and Systems for clients using documentary services Documentary Services International Wires in USD and Foreign Currency International Drafts in USD and Foreign Currency Foreign Check Processing • Foreign Banknotes & Travelers Checks International Payments and Other Services
Global Trade Solutions Working Capital Finance Cycle
US exports are excess of $1 trillion; 7% of those are on LC; 81% are on open account;
18% of U.S. exports are credit insured
DSO for exports: 68 days/DSO for domestic: 40 days – depicting additional WC demands to support export activity
Exporting often = working capital needs Pre-shipment finance Post-shipment finance Receivables finance Liquidity Management Order Make Ship Invoice Receivable Collect Global Trade Solutions
Global Trade Solutions: A full suite of international trade capabilities
Trade Letters of Credit
Standby Letters of Credit
Export Credit Insurance
Letters of Credit
Substituting SunTrust risk for foreign bank risk under letters of credit
Issuance of standby letters of credit to support bid/performance bonds
International Receivable financing
Export Working Capital Financing
Foreign Buyer Financing
Small Business Financing
Over 1500 international correspondent banks world wide
Referrals for in-country foreign banking relationships
Trade Services Solutions Risk Mitigation Trade Finance Solutions Advisory Services Treasury & Payment Solutions Inbound Foreign Investment Foreign Exchange Global Solutions for your business
Foreign Market intelligence
Export Marketing strategies
Referrals to other trade advisors
Currency Risk Management
Non-USD Interest Rate Management
Spot, Forward, NDF & Swap Contracts
Options (vanilla and structured)
Foreign Currency Transaction Accounts*
Foreign Currency Investments
Assistance to subsidiaries of foreign corporations expanding into U.S
Banking services to expatriates working for foreign owned subsidiaries
Online Information and Control Services
International Cash Position Management
Our broad capabilities serve your business through every phase of its international trade growth. International Correspondent Banking * Deposit products are offered through SunTrust Bank, Member FDIC
SunTrust Global Trade Solutions Team To truly understand your business and what drives it, we believe in the value of a dedicated relationship manager along with a team of product and industry specialists with local decision-making power. Director, GTS Sales Team Leader 404-588-7507 [email_address] Michael Filchock Vice President, GTS Sales Officer - Carolinas 704-362-4062 [email_address] Ron Reighter Managing Director, Global Trade Solutions Division Manager 404-813-1030, [email_address] Susanne Keough