The 2024 Government Work Report emphasizes that it is necessary to promote the optimization and upgrading of industrial and supply chains. Implement high-quality development actions for key industrial chains in the manufacturing industry, focus on making up for shortcomings, lengthening long boards, and forging new boards, so as to enhance the resilience and competitiveness of the industrial chain and supply chain. In the process of "stabilizing, supplementing and strengthening the chain", supply chain finance plays a pivotal role. The essence of supply chain finance is to use the quality and credit of the operation of the industrial chain and supply chain to finance funds for upstream and downstream enterprises, and then optimize the capital flow of the entire industrial chain and supply chain. Song Hua, professor and doctoral supervisor of the Business School of Chinese Minmin University, said in an exclusive interview with the Financial Times that in order to ensure that supply chain finance effectively serves these goals, it is necessary to deeply integrate and accurately connect with each "scenario", and promote and innovate the supply chain financial service model based on the scenario.
Song Hua is a professor at the Business School of Renmin University of Chinese, a doctoral supervisor, an expert in the market regulation expert database of the Ministry of Commerce, and the vice president of the China Logistics Society
The rich connotation and practical significance of "scene".
Financial Times: How should we understand the concept of "scene"? Song Hua: In business practice, the concept of "scene" contains rich connotations and practical significance, and it often depicts the specific situation of interweaving and dynamic interaction between enterprises, products or services, and the external environment. Scenarios are not only used as a descriptive tool, but also an important reference coordinate for enterprises to carry out strategic planning and tactical implementation, and are the key connection points to connect product value, service functions and market demand. Similarly, in the development path of supply chain finance, it is very important to fully integrate scenarios, and the goal of stabilizing the industrial chain, making up for the shortcomings of the industrial chain, and strengthening the advantages of the industrial chain can be effectively achieved through the "scenario-based" strategy. Specifically, the three key scenarios that supply chain finance focuses on include industrial operation scenarios, technological innovation scenarios, and institutional environment scenarios. It not only forms the basic framework to support the stable operation of supply chain finance, but also is the source of power to drive continuous innovation and profound change in supply chain finance.
The three-dimensional scenario is the key task for the continuous optimization and progress of supply chain finance
Financial Times: How does supply chain finance play a role in industrial operation scenarios? Song Hua: In the dimension of industrial operation scenarios, supply chain finance is closely related to the development of the real industry with its deep industrial foundation and close service attributes. Therefore, whether it can be deeply integrated into and closely combined with the actual industrial chain to innovate and develop the supply chain finance model has become a key factor in determining its sustainable and healthy development potential. In the process of discussing the integration of industrial scenarios, it can be divided into three progressive levels: the first level is to understand the industry. This stage requires financial institutions and service providers to have a comprehensive insight into the characteristics of each industry, carefully grasp the operation rules, business models and technology application status of different industries, and form a three-dimensional understanding of the operation mechanism of the whole industry chain from the production and manufacturing process to the logistics and distribution system and then to the transaction settlement link. The second level is the service industry. This means that supply chain finance is no longer just about understanding the appearance of the industry, but also about designing targeted financial solutions according to the characteristics of the industry and the specific needs of enterprises. The third level is the development of industry. Supply chain finance should keep up with the pace of industrial development, continue to iterate and continuously improve the service level, and always maintain a high degree of keen insight into industrial dynamics and change trends. In the process of actively adapting to and guiding the adjustment and upgrading of industrial structure, we are committed to realizing the close interaction and co-evolution between the financial system and the real economy. Especially in the current tide of industrial upgrading, many specialized and special new enterprises urgently need the strong support of supply chain finance to drive their rapid development. To this end, supply chain finance not only needs to broaden the scope of services, but also deepen the service content at the depth level. Financial Times: The development of supply chain finance is inseparable from the empowerment of science and technology. Song Hua: With the progress of the times and technological innovation, supply chain finance has gradually evolved from the past model of relying solely on the credit of core enterprises or entities to relying on network platforms and industrial ecosystems to build a new credit system, which makes scientific and technological innovation and digital transformation the core driving force to promote the upgrading and reform of supply chain finance. There are also three progressive levels in the technology scenario: the first level is technology solutions around risk management. Supply chain finance involves multiple business entities, links, elements and assets, which is easy to produce supply chain information asymmetry and hinder the development of supply chain finance activities, which is also the reason why many small and medium-sized enterprises are difficult to benefit from supply chain finance. Therefore, technology needs to empower supply chain finance, provide overall solutions, and realize real-time sharing, multi-party verification and intelligent management of supply chain transaction information by building an efficient, transparent and secure digital platform, so as to provide solid technical support for supply chain financial risk management. The second level is technology solutions around competitiveness. Technological means not only improve the design and issuance efficiency of traditional financial products, but also realize the accurate monitoring and prediction of the capital flow, logistics and information flow of the whole chain of the supply chain through smart contracts, Internet of Things technology and other tools, and then derive innovative financial products and services that are more in line with industrial needs and risk controllable. The third level is scientific and technological solutions for the industrial ecology. This level focuses on exploring and laying out future trends, and actively uses cutting-edge technologies such as fifth-generation communication technology (5G), edge computing, and artificial intelligence, in order to significantly expand the scope of supply chain financial services and improve efficiency. In this evolutionary process, the application scenarios of science and technology have been continuously enriched and deepened, which has effectively promoted the gradual transformation of supply chain finance from a single traditional financing service to a comprehensive service platform covering the entire industrial chain and cooperation, so as to build a closer and more intelligent ecosystem for the integration of industry and finance. Financial Times: What is the relationship between the institutional environment and supply chain finance in the institutional environment scenario? Song Hua: At this level, the role of the institutional environment in supply chain finance has the dual characteristics of regulating and promoting. On the one hand, it takes clear laws and regulations as the framework to stipulate the behavioral boundaries and operating rules of supply chain financial activities, to ensure its stable operation on the track of legal compliance, and to effectively prevent systemic risks and market disorder; There are also three progressive levels of the institutional environment scenario: the first level is the compliance institutional environment. In recent years, in the field of supply chain finance, a series of detailed and rigorous regulations and policies have been formulated and implemented at the national level to guide and standardize industry practices. The second level is the normative institutional environment. In order to ensure the healthy and orderly development of the supply chain finance industry, a comprehensive and meticulous system of standards and norms is indispensable. This framework covers specific operating procedures for the characteristics of supply chain finance businesses. The third level is the developmental institutional environment. This level is related to how supply chain finance can effectively respond to and effectively connect with the national strategic deployment and policy guidance in the process of industrial transformation and upgrading. Financial Times: Can I understand that the above three dimensions are the key tasks for the continuous optimization and progress of supply chain finance? Song Hua: Yes, the deeper and more thorough the understanding of the above three dimensions, the more in-depth and dynamic the development of supply chain finance will be. We emphasize that supply chain finance should uphold the core concept of "industry before finance", rather than just pursuing "finance before industry". This is because only based on the actual needs of the industrial chain, keeping up with the pace of scientific and technological innovation, and operating under the framework of national policy guidance and regulatory requirements, can supply chain finance truly play its role as a bridge connecting the real industry and financial services, promote the deep integration of the real economy and the financial system, and achieve multi-party symbiosis, co-prosperity and sustainable development.
Source: Financial Times client
Reporter: Wang Lu
Editor: Yunyang
Email: [email protected]