The recent unveiling of the "2024 Global Supply Chain Promotion Report" at the second Chain Expo has sparked significant discussions surrounding the burgeoning financial landscape of China's supply chains. The report notably reveals that in 2023, the country's supply chain finance industry reached a staggering scale of approximately 41.3 trillion RMB, marking a year-on-year growth of 11.9%, and reflecting a compounded annual growth rate of 20.88% over the past five years. Such impressive figures denote a vibrant evolution within the sector, highlighting the critical role of efficient financial services in ensuring the stability and seamless operation of both industrial and supply chains.

The current landscape, however, is fraught with challenges. Many enterprises within supply chains are grappling with significant funding gaps and financing bottlenecks that threaten their operational efficacy. This is where supply chain finance emerges as a crucial player, leveraging the creditworthiness of key enterprises within the chain and underpinning it with the collective credit of the entire supply network. By doing so, it adeptly addresses the financing challenges faced by various businesses across the chain. Banks and financial institutions have taken proactive measures in responding to these financing needs, crafting comprehensive financial solutions to support the efficient operation of supply chains.

Industries such as automotive, home appliances, and food and beverage stand out as pivotal sectors affected by these financial innovations. The integration of supply chain finance within these industries can provide unparalleled conveniences for both enterprises and consumers alike. At the recent Chain Expo, the Bank of China showcased its "Bank of China Intelligent Chain" zone, which spans ten sub-industries, attracting a keen audience eager to explore its offerings. Senior product manager Wang Lei emphasized the tailored approach of the “Intelligent Chain,” which specifically addresses the unique characteristics and requirements of enterprises within various industry supply chains, ensuring that businesses receive precise, relevant services.

For instance, in the home appliance sector, the Bank of China has centered its services around original equipment manufacturers, providing comprehensive financial support that extends upstream to component suppliers, downstream to distributors, and finally to end consumers. By focusing on the entire value chain, the bank not only aids in upgrading the industry's quality but also ensures consumers have access to affordable, high-quality appliances, a critical consideration in nurturing consumer trust and loyalty.

Furthermore, small and medium-sized enterprises (SMEs) that are specialized and innovative play an important role in supplementing, fortifying, and enhancing the supply chain process. These entities, recognized for their growth potential, often find themselves in urgent need of financing. In a bid to facilitate efficient connections between businesses and capital sources, the current Chain Expo featured an "One Chain a Month" investment and financing roadshow in collaboration with the National SME Development Fund and the Bank of China. Representatives from industry leaders in fields such as semiconductors, smart manufacturing, and edge computing showcased their business models, competitive advantages, and innovative highlights to an audience of prospective investors.

This initiative has yielded positive results, with participating companies reporting that the platform significantly aids in both visibility and access to funding. Notably, several investment institutions have already expressed preliminary cooperation intentions with these enterprises, suggesting the potential for enhanced technological research and development and broader market expansion in the near future.

As enterprises continue to generate vast amounts of data throughout their operational lifecycle, the influence of fintech on the efficiency of supply chain operations becomes increasingly pronounced. Industry experts at the supply chain service forum held during the expo emphasized that, with the support of fintech, there exists a richer and more diverse array of credit appraisal methods for chain enterprises. The trend is moving towards greater digitization and online integration of products, with numerous business processes now completed online, significantly enhancing approval and processing speeds.

Bao Xiaocheng, Deputy General Manager of the Beijing Branch of the Industrial and Commercial Bank of China, highlighted the bank's strategy of collaborating with "chain leaders" to create a supply chain finance service platform. This platform integrates data across the entire supply chain, encompassing cash flows, credit flows, logistics, and information streams, to facilitate swift and precise analyses of chain enterprises. This innovative system allows for timely responses to demands for settlement and financing while effectively controlling bad debt ratios.

In a similar vein, Zhang Yong, Deputy General Manager of the Corporate Institutional Business Department at the Bank of Communications, pointed out that chain enterprises experience heightened expectations for the timely arrival of funds, particularly during peak financial periods such as the beginning of the year or end of quarters. Addressing this necessitates leveraging advanced technologies. The Bank of Communications has implemented a project agility docking mechanism, utilizing techniques such as business profiling and intelligent information matching. They have introduced nearly ten financing products that offer loan approvals in as little as one minute, drastically reducing the typical processing time from one to two days—thus alleviating the prolonged cash collection cycles faced by businesses and ensuring smooth operational throughput within supply chains.

Nonetheless, a prevailing reliance on core enterprises for credit endorsement, collateral assurance, and repayment commitments persists within the realm of supply chain financing. As Zhang points out, the transformation driven by digitization enables the standardization of complex technical clauses and documentation, facilitating a greater extent of transactional transparency and credit sharing. This evolution helps diminish the over-reliance on core enterprises, creating pathways for a decentralized financing model across the supply chain.

Looking forward, Zhao Ping, the president of the Research Institute of the China Council for the Promotion of International Trade, advocates for innovative advancements in cross-border financing products and services, which will enhance the financing institutions' support for core enterprises and pivotal players within supply chains. Utilizing technologies such as blockchain, the Internet of Things, and big data can significantly enhance the digitalization of supply chain finance. Additionally, leveraging the credit of core enterprises can foster stronger commercial credit across all entities involved in the supply chain, enhancing the overall financial resilience of this critical economic framework.