when the chengxing supply chain incident has not been concluded, the china banking regulatory commission (circ) issued the guidance of the general office of the bank of china insurance regulatory commission on promoting the real economy of supply chain financial services (no. 155 [2019]) to various industries, proposing business standards for institutions engaged in supply chain finance. the purpose of "military regulation" is to clarify the closed-loop relationship of the booming supply chain finance.
supply chain finance, which has been upgraded to the national strategy, involves upstream and downstream enterprises (financiers), banks and non-bank financial institutions (fund suppliers), core enterprises in the industrial chain (participants) and many other participants. in this closed loop, logically, the possible tightening effect will be transmitted to the upstream and downstream enterprises of the financing party after the regulation of the capital end.
a closer look at article 155, however, suggests that it is about regulating the supply chain financial market, not suppressing it. and the supply chain finance, which is rapidly heating up in 2017, is driven by policies, and its development is taking off. for example, guidance of the general office of the state council on actively promoting innovation and application of supply chain (guoba [2017] no.84). the document encourages commercial banks and core enterprises in the supply chain to establish a supply chain financial service platform to provide efficient and convenient financing channels for smes in the upstream and downstream of the supply chain.
in february 2019, my, the state issued by the several opinions on strengthening financial services of private enterprises are also pointed out that the core enterprise credit, commercial banks should rely on industry chain real trade background and logistics, information flow, cash flow loop, for upstream and downstream enterprises to provide orders without collateral financing, accounts payable receivable financing.
the "closed-loop chain" of supply chains, endowed with the will to finance inclusion, also involves eight ministries. in april 2018, the circular of the ministry of commerce and other 8 departments on the implementation of supply chain innovation and application pilot (commercial construction letter [2018] no. 142) was issued, which decided to carry out the nationwide pilot of supply chain innovation and application in cities and enterprises.
under the policy blessing, the supply chain finance this fire particularly exuberant. statistics show that the issuance scale of supply chain (financial abs) in 2018 was about 143.8 billion yuan. china's supply chain financial market may reach 27 trillion yuan by 2020.
now, silver keeps meeting to pull the capital on this chain to offer end gently, so, whether does a few big core participate in a party to have disease? will the innovation and application of supply chain finance in the pilot be affected?
in essence, supply chain finance is an innovation of financing mode to solve the financing difficulties of smes. but in practice, there are deviations.
perhaps the recent events are more like an accounts receivable financing scam. in theory, the annual sales of chengxing are not enough to support the receivables of 3.4 billion yuan. article 155 requires banks to establish and improve the risk control system for the whole financial chain of the supply chain to ensure the flow of funds to the real economy.
in fact, the silver insurance regulatory commission is also 142 text countersign one of the departments. the article 155 is in line with the article 84 of the state council and the article 142 of the eight ministries and commissions. it can be seen that the emphasis on "standardized operation and risk prevention" is the consistent principle of the government's power supply chain finance.
however, in some cases, once emerging things are labeled as "tuyere", they tend to be alienated when the standardization system is not established and perfected, especially when it can be classified into the big category of fintech -- under the big frame of fintech, there are different kinds of "players". remember once extremely hot network loan, consumer finance? profit-seeking capital first rushed to internet finance, then to "supply chain finance", and quietly changed from c-end finance to b-end layout...
accordingly, fintech regulation has shifted from once inclusive regulation to now strict regulation. but in the current environment, there are concerns that excessive financial regulation could stifle innovation in fintech.
li wei, head of the central bank's science and technology department, said publicly that the people's bank of china is making plans for the development of fintech. the central bank, in conjunction with relevant ministries, has launched pilot projects in 10 provinces and cities, including beijing and shanghai, for the application of fintech, china's version of the regulatory sandbox. the pilot, designed at the beginning of the risk compensation and exit mechanism, can be overturned to start over.
so is the fintech regulatory system expected by the market to be integrated and efficient and open moving forward? and in this process, with the confidence to start over, whether we will be more confident in the system design? take fewer detours? more practical research, less exercise of "one size fits all" regulation? "regulation" or "tolerance"; balancing regulation and innovation is an "art" that requires experience as well as technology. i believe that after risk baptism, the market ecological environment will become increasingly healthy. just as, after the issuance of no.155, we also heard the voices of enterprises in the technical end of the supply chain: most of the non-bank financial institutions have problems in risk control, and the article no.155 is an opportunity for innovation platforms like "cloud chain of chinese enterprises", including "magnetic cloud technology".
we believe that this is true not only in supply chain finance, but also in other markets. it is reasonable to use regulatory technology, standardization and institutional construction to make "counterfeiters" drill without holes and eliminate bad currency. those who play with fire must beware!
source: phoenix finance & economics