Bank Hapoalim signed an agreement with the Agricultural Bank of China to provide a line of credit to fund Chinese purchases of equipment and services from Israeli exporters, the bank said Monday. Sales of goods and services in such fields as telecommunications, agricultural equipment, infrastructures, environment, medical equipment and education would benefit from the arrangement. "This agreement joins four other credit agreements already active between Bank Hapoalim and leading banks in China, which enables the bank and the exporter greater flexibility in funding export deals from Israel to China," said Bank Hapoalim business department director Yaakov Orbach. The Agricultural Bank of China is "a commercial bank in every sense," and was not chosen for any specifically agricultural reasons, bank sources said. The loans will provide long-term funding covering the full investment of projects valued at a minimum of $500,000. Bank sources indicated there was no formal maximum. While the initial deposit, covering 15% of the investment, would be paid back within one year, the remainder of the loan would be paid back within seven, 10 or 12 years, depending on the value of the project. Each agreement approved would require a specific funding agreement, which would take the form of a pre-formulated electronic exchange between Bank Hapoalim and the Agricultural Bank of China, allowing the banks to cut costs and shorten the process. The partnership with a Chinese bank also would ensure easier navigation through the country's bureaucracy, bank sources indicated. The agreement was signed in the context of the preferential conditions provided by the Second Financial Protocol signed between Israel and China and managed by IFTRIC (The Israel Foreign Trade Risks Insurance Corporation Ltd.), a government company. Signed in 1996 and activated in 2002, the initial Financial Protocol was expanded and renewed in 2004 in the context of the Second Financial Protocol, bringing the total framework provided to $550 million. The funding has primarily aided exports of medical equipment, said Amiram Halevy, director of the Asia & Pacific Division at the Industry, Trade and Labor Ministry's Foreign Trade Administration. Bank Hapoalim has carried out more than 90% of the funding for exports to China arranged through the financial protocols, the bank said. Trade between Israel and China totaled $2.99 billion in 2005, of which Israeli exports accounted for $725m., down 5.7% from 2004, the ministry said. Machinery and equipment purchase fell by more than one-quarter, while medical and optical products fell by nearly one-fifth. Chemical product sales, however, grew 40%, while diamond sales rose 12% and plastics rose 54%. Halevy explained that the reduction in exports to China was a result of the Chinese government's successful efforts to cool down the country's avid domestic demand, and predicted that the trend would likely continue into 2006.