Staff members check auto parts at a worshop of an auto part supplier in Qinhuangdao, north China's Hebei Province, April 20, 2020. (Xinhua/Yang Shiyao)
BEIJING, Sept. 23 (Xinhua) -- China on Tuesday released a guideline on standardizing the development of supply chain finance (SCF) to support the stable operation and upgrading of supply chain and industrial chain.
The guideline jointly released by eight departments including the People's Bank of China, the Ministry of Industry and Information Technology, the Ministry of Justice and the Ministry of Commerce put forward 23 measures to steadily promote the development and innovation of SCF.
Small and medium-sized enterprises (SMEs) in China often face difficulties in accessing the required liquidity to operate. This is often due to a lack of proper information and transparency. To solve this problem, the Chinese government has been making efforts to develop SCF industry to foster a technology-based access to finance for SMEs.
The guideline made it clear that SCF refers to constructing a financial supply system and risk assessment system engaging core enterprises, upstream and downstream enterprises in a supply chain based on real business transaction by using financial technologies to integrate logistics, capital flow and information flow.
With SCF, banks and other financial institutions are encouraged to provide comprehensive financial solutions concerning areas such as settlement, financing and financial management to enterprises so that their costs can be reduced and the value of all parties in the industrial chain will be enhanced.
Financial institutions, major companies, warehousing and logistics enterprises, science and technology platforms should focus on their main business and strengthen information sharing and collaboration, according to the guideline.
The guideline also mentioned that efforts will be made to improve the Internet-backed digitalization of supply chain financing and settlement. For instance, under the conditions that transaction information of supply chain is clear, cash flow and risks are controllable, banks can carry out online checks before, during and after loan issuance through the financing pilot of upstream enterprises in the supply chain.
As the guideline told, financial institutions should improve financial services for enterprises involving in the international industrial chain. They should make full use of their domestic and overseas branches to support the construction of foreign trade transformation and upgrading base, help enterprises tap overseas markets, and facilitate export-related companies to resume business contracts with overseas partners so as to help restore global industrial chain.
Standardizing the development of supply chain finance and promoting the cooperation and common development between upstream and downstream enterprises in the industrial chain will be conducive to giving full play of financial services in sustaining the real economy, ensuring business operation and employment, cementing domestic industrial chain, and accelerating the development of dual circulation, said Dong Ximiao, chief research with Merchants Union Consumer Finance Co., Ltd. (Edited by Su Dan with Xinhua Silk Road, sudan@xinhua.org)
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