Supply Chain Finance in China: data and cases to understand this market
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China has entered what might be one of the most delicate phases of its development: after years of high growth the country is now facing a period of slower development, coupled with tensions in the global trade landscape. Under these mutated macroeconomic conditions, it became crucial for China to protect and foster the growth of its businesses, especially Chinese SMEs, which count for 80% of employment and more than 60% of the GDP.
However, Chinese SMEs face difficulties in accessing the required liquidity to operate. This is often due to a lack of proper information and transparency which, sometimes, makes it difficult to even verify the information of a single invoice. To solve this financing problem, the Chinese government strongly focused on the development of the SCF industry, fostering a more inclusive and technology-based access to finance for its smaller companies.
This volume explores and describes this vibrant industry, focusing on two aspects: (1) a general picture of the market, that explains its structure, main players and trends in development, correlated by data and statistics on the most common SCF schemes available now on the market, sourcing of funding and bottlenecks in SCF adoption, and (2) a series of cases that illustrate the most innovative SCF applications available now in the Chinese market, with a strong focus on SME financing. These cases present how the Chinese SCF market is on a path of technological innovation that is overcoming most of the obstacles that, in the last years, have limited the ‘financiability’ of SMEs.