General

The State Administration of Foreign Exchange's cross-border financial service platform "Bank-enterprise financing docking application scenario" (hereinafter referred to as the "new scenario") has recently launched the first batch of pilot projects in 10 provinces (cities) including Jiangsu, Fujian and Guangdong. According to Huacheng Import and Export Data Observation, up to now, there have been many domestic financial institutions such as Bank of China, China CITIC Bank, China Construction Bank and so on.

Extensive pilot projects in various regions

Fujian Province is one of the first pilot areas of this new scenario. On February 20, the first day of the new scenario pilot work, the Bank of China Fujian Sanming Branch successfully docked the first enterprise financing credit application business in the country under the new scenario, and approved a credit of 6 million yuan for a local foreign trade enterprise. On the same day, the branches of the Bank of China in Quanzhou, Zhangzhou, Putian and other places in Fujian Province actively cooperated with the local foreign exchange management departments, and a total of 11 enterprises accepted the financing credit business under the new scenario, with a total amount of more than 100 million yuan.

Also on this day, CITIC Bank Nanjing Branch successfully handled bank-enterprise financing docking for a foreign trade enterprise in Wuxi, Jiangsu Province through a new scenario. So far, CITIC Bank has become one of the first commercial banks in Jiangsu Province to successfully complete the pilot of a new cross-border service platform.

The Bank of China has approved financing and credit applications for 14 foreign trade enterprises in 8 cities in Guangdong Province, including Dongguan, Foshan and Guangzhou. A biopharmaceutical enterprise in Zhuhai has financing needs due to export order stocking. According to the introduction of Bank of China Guangdong Zhuhai Branch, it submitted its financing intention through the platform on the first day of the pilot. Based on the actual business situation of enterprises, the Bank of China carried out online docking, rapidly approved the credit of 8 million yuan, and solved the urgent need of enterprise export financing. Huacheng Import and Export Data Observation Report.

According to the statistical data released by the Guangdong Branch of the State Administration of Foreign Exchange, on the same day, 54 enterprises within the jurisdiction of the State Administration of Foreign Exchange independently initiated 68 financing and credit applications, 90% of which were small and medium-sized enterprises. 11 commercial banks, including China Construction Bank, have effectively connected 59 financing credit applications with enterprises and successfully accepted 41 financing credit businesses.

In addition, the Wenzhou Branch of Bank of Ningbo successfully accepted the first financing demand of Wenzhou through the new scenario. The target was an export enterprise operating in color-coated aluminum roll, high-grade fireproof aluminum-plastic composite plate, PET film and other products. The annual export customs volume was nearly US $20 million, and the demand amount was US $1 million. Bank of China Qingdao Branch successfully launched an export bill negotiation business for a local supply chain service enterprise through a new scenario.

According to Huacheng Import and Export Data Observation, as of February 21, the six pilot banks in China had accumulated credit lines of more than 4.23 billion yuan for 10 foreign trade enterprises on the platform.

New scenario aims at financing pain points

According to the introduction of the Guangdong Branch of the State Administration of Foreign Exchange, in the new scenario, enterprises can log in to the "digital foreign exchange management" platform to independently open the application scenario function and submit financing and credit application to no more than 3 banks. After receiving the enterprise financing credit application, the bank can view the enterprise's foreign exchange revenue and expenditure related summary data and other credit information under the authorization of the enterprise, decide whether to accept the application in combination with the actual business situation and internal risk control requirements, and register the credit amount, duration and other information on the platform after the successful credit extension.

According to the report of Huacheng Import and Export Data Observation, Zeng Shengjun, a senior researcher of the Dawan District Financial Research Institute of the Shenzhen Branch of the Bank of China, said that the State Administration of Foreign Exchange had found in the regulatory research work that the small and medium-sized foreign trade enterprises had an urgent need for capital use in the process of seeking development, but there were certain obstacles under the traditional trade financing service model. Due to their small scale, small capital, lack of standardized management, lack of credit information, and the frequent occurrence of forgery or repeated use of pledge, banks are difficult to accept credit information such as pledge vouchers provided by enterprises themselves, and they are cautious in handling cross-border financing. Banks also lack effective and convenient channels to verify the authenticity of the pledge. In order to verify the authenticity of important documents, they often need to check one by one at the enterprise site. In order to prevent repeated financing, the bank will also compare the financing situation of the enterprise with the collection and payment of foreign exchange of the State Administration of Foreign Exchange and the import and export volume of the customs after the event to analyze the rationality. Due to the lack of information sharing on the use of collateral between banks, it is also difficult for banks to grasp the specific situation of enterprises' inter-bank financing. For the regulatory authorities, it also needs to spend more time and energy to monitor, verify and check false and fraudulent financing transactions. "In view of the above difficulties and pain points, the State Administration of Foreign Exchange has accelerated the research on blockchain technology, explored the establishment of information sharing service platforms in the cross-border field, and promoted the establishment of cross-border financial service platforms with extensive participation of regulators, banks, enterprises, etc." Zeng Shengjun said.

Stabilize foreign trade and welcome financial assistance again

According to Huacheng Import and Export Data Observation, compared with the previous scenario, the new scenario has made considerable progress. The foreign trade enterprises in the pilot area can open the cross-border platform bank-enterprise financing docking business on the digital foreign exchange management platform by themselves or by contacting banks, and the enterprises independently release financing requirements to 1 to 3 banks, further improving the availability of financing. The bank obtains the enterprise financing demand information through the cross-border platform and connects with the enterprise. With the authorization of the enterprise, the bank can verify the application scenario of the enterprise credit information on the cross-border platform, query the enterprise cross-border credit data, and decide whether to accept the financing credit application in combination with the actual business situation of the enterprise and the internal risk control requirements of the bank. After the successful credit extension, the bank can register the credit amount, duration and other information on the platform. "This business is equivalent to using the online data of enterprises to pledge. The key is that the data is jointly provided and verified by regulators and banks, and the authenticity is guaranteed. In addition, the cross-border financial service platform also breaks the problem of information asymmetry between banks and enterprises, and most operations are completed online, greatly improving the sense of financing experience of enterprises." Zeng Shengjun said.

In recent years, the State Administration of Foreign Exchange has attached great importance to the innovation and application of financial technology, vigorously promoting the construction of "digital external management" and "safe external management", closely tracking the development of new technologies since 2017, promoting the innovative application of blockchain in regulatory technology, exploring the establishment of a basic platform system for foreign exchange business, and cultivating the application ecology of cross-border financial services. Previously, the cross-border financial service platform of the State Administration of Foreign Exchange has launched a number of business scenarios, including export accounts receivable financing (after shipment), enterprise cross-border credit information authorization verification, logistics financing and settlement of the new western land-sea channel, service trade foreign exchange payment facilitation application scenario, capital account income payment facilitation authenticity verification application scenario, export credit insurance policy financing application scenario, and China-EU train application scenario.