Research on the Problems and Countermeasures of China's International Trade Financing

School of Economics and Management, Henan Institute of Science and Technology, Xinxiang, Henan 453003?

This paper discusses the present situation and existing problems of trade financing of Chinese enterprises, and makes further analysis and research on its causes, with a view to finding some countermeasures and methods to solve such problems, so that Chinese enterprises can go out faster and better, and export can promote the rapid economic development.

Keywords: international trade financing;

Problems;

Countermeasures?

China Library Classification Number: F740 Document Identification Number: Part A Number:1007-6921(2008) 22-0060-03.

1 What are the problems in international trade financing?

1. 1 Is there a lack of diversity in international trade financing?

Nowadays, the scale and mode of international trade are developing in a higher and more complicated direction. Although there are more and more financing methods for international trade, more and more enterprises are beginning to try new financing methods, but in practical application, the traditional financing methods are still the main ones, that is, the combination of letter of credit settlement and financing, with few varieties and single functions, while the more complicated businesses such as international guarantee agency and forfaiting account for a small proportion. ?

1.2 international trade financing funds are unevenly distributed among banks of different natures?

Banks that provide financing for international trade are commercial banks and policy banks. Relatively speaking, state-owned commercial banks have abundant funds, but they do more trade financing with short term, strong liquidity and small amount;

As for policy banks, because the state supports them strongly and the risks are borne by the state, they can do those medium and long-term trade financing. Therefore, there is a structural imbalance in the sources of funds for international trade financing. ?

1.3 Is there a shortage of international trade financing market?

What is lacking in China's trade financing market is a unified and centralized trade financing market. When enterprises carry out trade financing, the circulation of trade financing assets is often relatively free. The actual practice is that buyers and sellers mainly rely on their own networks for financing, so there is a lack of competition and the possibility of black-box operation is increasing. The lack of an open, fair and just trade financing market cannot meet the trade financing needs of enterprises well. ?

1.4 The target of international trade financing is too concentrated?

Large and medium-sized state-owned enterprises are an important pillar of China's national economy and have always been supported by a large number of comprehensive funds. Both commercial banks and policy banks tend to take large and medium-sized enterprises as financing targets. At present, China's non-state-owned enterprises, that is, foreign-funded enterprises, foreign-funded enterprises and foreign trade private enterprises, can only obtain a small part of trade financing, which is incompatible with its rapid development and its increasing proportion in China's foreign trade development. ?

1.5 complicated financing procedures and harsh financing conditions?

In the process of applying for international trade financing, the application procedures of enterprises are complicated and complicated, and there are many restrictions on the corresponding processing conditions, such as long processing cycle and low efficiency, which greatly increase the operating costs of enterprises and make them feel afraid of difficulties. In this environment, many enterprises' demand for international trade financing is eliminated. ?

1.6 Lack of effective measures to prevent international trade financing risks?

The characteristics of international trade financing determine that the risks involved are more complicated, but they can be predicted and prevented. However, scientific and effective forecasting methods and preventive measures have not been applied in enterprises. For example, the traditional and non-targeted 5C method is still adopted for credit risk, which does not take into account the new characteristics of international trade financing and the situation different from general loans;

As far as national risks are concerned, the methods of assessment and prediction are not very scientific. ?

1.7 China's international trade financing is prone to legal disputes with other countries in the world?

International trade financing is a traditional financing method. After a long period of development, it has gradually formed a set of standardized international practices and common practices. However, in China, cases of disharmony or even conflict with international conventions and common practices occur from time to time, illegal business operations occur from time to time, and legal disputes continue. ?

2 Analysis of the causes of international trade financing problems?

2. 1 constraints of modern information technology?

With the support of advanced technology, the risk management involved in international trade financing business will be more efficient, and the relevant departments and branches of banks can be linked efficiently and organically. Foreign banks have launched e-commerce, that is, establishing trade financing capital markets and distribution channels online. In this way, banks can expand distribution channels, set foot in new customer groups at a lower cost, grasp the background of enterprises and their transactions more easily and timely, and evaluate the risks and quality of trade projects and financing assets more accurately, thus effectively managing the risks involved in international trade financing business. However, at present, China's banking industry can only say that it has basically completed the stage of financial electronic construction, and financial informatization has just begun in some banks, lacking the enjoyment of network resources and unified and coordinated management, so that it is impossible to achieve the purpose of monitoring risks and restricting each other, and thus it is difficult to achieve the purpose of controlling risks.

2.2 Banks have insufficient understanding of the importance and risks of developing international trade financing business?

2.2. 1 The senior managers and relevant departments of commercial banks lack understanding of international trade financing business, and generally have a superficial understanding of the risks of international trade financing business, showing two tendencies: ① they mistakenly believe that international trade financing can earn handling fees and financing interest from customers only by lending documents or opening letters of credit, which is a zero-risk business, which directly led to the formation of non-performing assets by banks in the mid-1990s due to a large number of advances in letters of credit;

(2) When in doubt, it is considered that the risk of international trade financing is high, and the measures taken make it more difficult to grant credit for international trade financing than ordinary loans, and the approval time is long, which restricts the development of this business. ?

2.2.2 The traditional business of commercial banks is local currency business, and the proportion of international business is relatively small, so that most people think that instead of spending a lot of manpower, material resources and financial resources to develop international trade financing, it is better to concentrate on developing local currency business. In addition, the role of international trade financing business in improving the profitability of banks and optimizing the quality of credit assets is not well understood, and it is considered that trade financing business is small in the whole credit assets, which leads to many potential risks buried by banks during this period. ?

2.2.3 ideological understanding is not in place. International settlement and trade financing is one of the earliest businesses that the financial industry began to integrate with international practices, and it is also the most likely business in the field of internationalization. Although we have made rapid progress through years of efforts, there is still a gap between our ideas, understanding and practice and those of the same industry abroad. ?

2.3 The overall quality of bank employees and foreign trade business personnel is not high?

Banks lack high-quality talents to create and apply innovative products. According to their different roles in financial innovation, bank employees can be divided into decision makers, general business personnel and developers. The role of decision makers is to decide whether to put forward an innovative proposal. This requires decision makers to have strategic vision and scientific analysis ability to judge whether innovative proposals have market prospects and profitability;

We should have a development vision and foresee the future trend of the market. The role of general business personnel is to find the defects of existing products and services in their daily work and make suggestions for the problems. This requires general business personnel to understand various financial policies, have comprehensive knowledge, be active in thinking, be familiar with domestic and foreign financial products, and have the ability to process the inspiration of generate in daily work into project feasibility analysis. The role of developers is to carry out technical development of innovative suggestions and form ready-made market products. This requires developers to have both rich computer knowledge and more financial knowledge, so as to better combine them and develop innovative products that are convenient and available. At present, some bank personnel know little about the use, advantages and disadvantages of various financial instruments and financing means of banks, let alone accurately judge and grasp risks. The low level of bank personnel makes it more difficult to control the risk of international trade financing, which increases the phenomenon of banks' reluctance to lend, and also causes China's international trade financing methods to lag behind developed countries in comprehensive application. ?

The quality of foreign trade personnel in enterprises is not very high. Foreign trade enterprises lack talents who are familiar with the operation of international finance and international capital market, the quality of business personnel and financial personnel can not keep up with the needs of the situation, and the relevant professional knowledge is insufficient. Many enterprises don't know about new trade financing tools such as international factoring and export credit insurance, and don't realize that adopting more flexible international settlement methods through international trade financing can better promote the development ability of goods in the international market. ?

2.4 China's international trade financing legal system is relatively backward compared with the international?

China has been engaged in international trade financing for a relatively short time. When the international trade financing business involves financial and commercial bills, real rights, goods, guarantees, trusts, etc. It is required that the law should have specific provisions on the responsibilities and rights of the above acts, but the relevant legislation lacks very clear norms on the above aspects. ?

3 Countermeasures and suggestions to solve China's international trade financing problems?

In view of the above problems existing in China's international trade financing, combined with China's actual situation, the following solutions and suggestions are put forward. ?

3. 1 Banks should provide quality services and cultivate a good "soft environment" for international trade financing?

Banks should carry out technological innovation, launch a variety of special services of enterprise trade financing business in a timely manner, clarify the standards of enterprise credit support and audit, focus on the logistics products that are welcomed by the market, with little price fluctuation, normal trade circulation and meet the pledge conditions, organically combine bank capital flow with enterprise logistics, and provide enterprises with comprehensive banking services integrating financing, settlement and other banking services, so as to solve the problem of difficult guarantee for Chinese enterprises to some extent. ?

Formulate preferential policies, define work objectives, and create a good soft environment to attract talents. To create a good institutional and policy environment for the flow of talent information and other factors, we must first integrate ideas and systems, speed up the integration of systems and mechanisms, and cultivate a "soft environment" for financing. This "soft environment" means that the government, banks and enterprises can cooperate well, the three parties can check and balance each other, and a relatively relaxed financing environment can be realized under the existing conditions. The strengthening of tripartite trust is conducive to the smooth progress of trade financing. ?

3.2 Banks and enterprises to strengthen cooperation, * * * with the study of international trade financing risk control means?

The cooperation between banks and enterprises is a systematic project, which requires the joint efforts of both banks and enterprises. Banks should further strengthen publicity, especially inform relevant enterprises of the latest bank credit policies in a timely manner, actively guide enterprises to establish and improve financial management systems, and enable real-time and effective communication between internal systems of enterprises and banking systems, so as to achieve the degree of mutual cooperation, mutual promotion and mutual improvement, and carry out exchanges and cooperation in trade financing and other aspects. * * * We will study the countermeasures to prevent the risks of financing business, and the information of all parties will be transmitted to each other through the system, so that the cooperation will proceed smoothly and the financing mode and level will be greatly improved. Enterprises should make full use of policy export credit insurance to avoid risks. Most import and export enterprises in China need to use export credit insurance to resolve risks because they can't conduct customer credit investigation. It is necessary to study the national export credit policy and the operation of relevant institutions, and handle export credit insurance for D/P, D/A and D/A businesses to mitigate risks. By changing the settlement method and insuring export credit insurance, export enterprises can not only obtain risk protection and financing convenience similar to letters of credit, but also simplify procedures, reduce management costs, improve market competitiveness and income level, and achieve the grand goal of becoming bigger and stronger. ?

3.3 The government, enterprises and banks work together to promote the diversification of international trade financing business?

With the rapid development of China's foreign trade, the financing channel of import and export enterprises has gradually changed from a single bank loan to more use of trade financing to solve the capital problem of enterprises. Trade financing business has been paid more and more attention by banks and enterprises because of its advantages of low risk, high income, simple procedures and strong financing timeliness. In addition to the good cooperation between banks and enterprises, the government also plays an important role in financing, always paying attention to the new changes in the international situation to keep up with them, so that banks and enterprises will not be too passive in financing, making it more efficient and with the lowest cost. The government's public service consciousness can't be reflected through economic behavior in actual operation, which will distort the government image and is not conducive to the diversified development of financing forms. Other forms of trade financing, such as bills, packaged loans, international factoring, forfaiting, bank guarantee and standby letter of credit, can be carried out smoothly under the background of tripartite cooperation. First, the credit department will conduct a comprehensive inspection of customers, grasp their economic strength and short-term solvency as a whole, and determine the total amount of credit they can bear;

Then, through the tracking of customers' business by international settlement personnel, we can master customers' business capabilities and business characteristics, formulate applicable financing methods and supporting quotas, and fully carry out related business within the total amount. In this way, we can use the power of the three parties to promote the diversification of trade financing. China enterprises can flexibly use the above financing methods in all aspects of import and export, and be familiar with the operation and financing channels of various financing methods. At the same time, enterprises should actively explore other financing channels in their own development, such as financial leasing, government subsidies, export tax rebates and so on. Optimize the financing structure. ?

3.4 Banks and enterprises should concentrate on the advantages of trade financing talents and improve the quality of trade financing business managers.

① Enterprises should introduce high-level and high-quality talents;

(2) pay special attention to job training;

③ Continuously improve the service quality and moral cultivation of trade finance managers;

(4) Strengthen risk awareness, constantly improve the ability of trade financing managers to find and prevent counterfeiting, and strive to prevent and resolve international trade financing risks. ?

Banks should establish and improve a scientific risk management system for financing trade and strengthen risk management. Banks must first formulate customer evaluation standards that conform to the characteristics of international trade and convenient financing, and choose customers who have been engaged in international trade for a long time and have good credit;

Secondly, it is necessary to set up a credit approval center and a trade finance business department to give full play to the advantages of talents and prevent and resolve various business risks in advance. ?

3.5 the government should strengthen the construction of laws and systems, and standardize the international trade financing market order?

On the one hand, China's legislature must strengthen the research on international trade financing policies and laws; On the other hand, we must start with the loopholes in existing laws and regulations, analyze the problems between international practices and China's current laws, provide a basis for scientific legislation, formulate practical operation plans, and connect with international practices and common practices to further promote the development of China's international trade financing. However, this requires a process. At present, the most important task in China is how to integrate with international practices, formulate a set of practical business operation plans, and rely on the law to escort the smooth development of corporate financing business in China. ?

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