Promoting Regulated Development and Innovation of Supply Chain Finance, and Supporting Stable Circulation, Improvement and Upgrading of Supply and Industrial Chains
In order to thoroughly implement the decisions and arrangements of the Central Committee of CPC and the State Council, provide proper financial support for stabilizing businesses and securing employment, offer targeted services for the completeness and stability of supply and industrial chains, facilitate the virtuous circulation and structural improvement of the economy, the People’s Bank of China (PBC), together with Ministry of Industry and Information Technology (MIIT), Ministry of Justice (MOJ), Ministry of Commerce (MOC), State-owned Assets Supervision and Administration Commission (SASAC), State Administration for Market Regulation (SAMR), China Banking and Insurance Regulatory Commission (CBIRC) and the State Administration of Foreign Exchange (SAFE), issued the Opinions on Regulating the Development of Supply Chain Finance and Supporting the Stable Circulation, Improvement and Upgrading of Supply and Industrial Chains (Yinfa [2020] No. 226, hereinafter referred to as the Opinions).
The Opinions put forward 23 policy requirements and measures from six aspects, including accurately understanding the implication and identifying the development path of supply chain finance, steadily promoting regulated development and innovation of it, stepping up construction of supporting infrastructure, improving the policy support system, preventing relevant risks and tightening supervision of the supply chain finance.
The Opinions specify that supply chain finance should unswervingly serve to improve the operational efficiency of supply and industrial chains, lower business costs, boost the completeness and stability of supply and industrial chains, and support the improvement and upgrading of industrial chain and the national strategic arrangements. Market entities should strengthen sharing and cooperation based on their own professional advantages and market orientation, so as to maintain a fair and orderly market and promote the virtuous industrial circulation.
The Opinions note that financial institutions and enterprises should strengthen information sharing and coordination, upgrade the overall financial services for the industrial chain, and improve the online and digital settlement services for supply chain finance. Efforts should also be made to improve the standardization and transparency of receivables, increase the efficiency of financing secured by receivables by micro, small and medium-sized enterprises (MSMEs), support reconnecting and repairing the global industrial chain, develop supply chain finance secured by inventory, warehouse receipts and orders in a regulated manner, and enhance support for protection against risks in supply chain finance.
The Opinions require that functions of the supply chain commercial bill platform should be enriched to realize unified registration and announcement of chattel and right pledge. The rules for the regulation and inspection of supply chain finance should be improved, and the credit constraint mechanism should be established. More efforts should be made to prevent and control the credit risks of core enterprises, operational risks in supply chain financial businesses, risks of fraudulent trading and repetitive financing, as well as risks in Fintech application.
The Opinions stress that large-scale enterprises in the supply chain should be strict with payment disciplines and confirmation of receivables pledge, without infringing upon interests of MSMEs. Institutions conducting supply chain financial businesses should strictly comply with national macro-regulation and industrial policies, and strengthen business compliance and risk management.
