Chongqing - Chongqing is speeding up the inauguration of a financial service consortium for the New International Land-Sea Trade Corridor (ILSTC) and exploring a new financial services model to develop the ILSTC. "The preparatory work has been completed, and the consortium will be officially established during the upcoming 5th China-Singapore (Chongqing) Connectivity Initiative Financial Summit (5th CCI-FS)," said an official of Chongqing Local Financial Supervision and Administration Bureau.
The fashionable Jiangbeizui CBD witnesses the growth of Chongqing's financial industry. (Photo/Si Qi)
With the steady progress in the development of the ILSTC, enterprises have accelerated their pace of "going global," and the demand for related financial services has become increasingly robust. In recent years, Chongqing has sustained efforts in innovative exploration to ensure sound financial assistance for developing the ILSTC.
In December 2017, Chongqing took the lead in launching a logistics finance innovation pilot program in China. Given that the ILSTC connects Europe with Asia and harnesses the transportation routes over both land and sea, Chongqing pioneered the pilot program of one single bill of lading for rail-sea intermodal transport in the country in 2019, based on one rail-sea intermodal transport bill of lading that runs through the whole process of rail and sea transport, enterprises are provided with multimodal transport insurance, the credit enhancement for a bill of lading financing, freight factoring and other financial services.
"The innovative launch of the financing model of one single bill of lading for rail-sea intermodal transport is an important achievement of Chongqing in exploring the new financial rules for the interconnected development of land and sea trade." The official of Chongqing Local Financial Supervision and Administration Bureau said that by relying on this model, we had realized the smooth connection of cross-border multimodal transport along the corridor, effectively reducing the logistics cost of enterprises.
Due to the information asymmetry of banks and enterprises in the context of international trade, China's import and export enterprises generally face challenges such as difficult financing, low efficiency, and less diversified financing product. In response to this situation, a number of Chongqing-based banks have cooperated with market entities in recent years to customize a variety of special financing products for import and export enterprises related to the corridor.
"In recent years, Chongqing's financial sector has been actively innovating products and services around infrastructure, industry, trade, and other fields, and increasing financial support for developing the ILSTC," said the official of Chongqing Local Financial Supervision and Administration Bureau. By the end of 2022, financial institutions in the city will have issued loans of nearly 500 billion yuan (about 72.7 billion U.S. dollars) for infrastructure projects and trade and logistics enterprises related to the corridor.
Industrial development and upgrading have brought about high financing demand from provinces, autonomous regions, and municipalities along the corridor, but the financial supply is slightly insufficient, and the demand of enterprises and the limited financial supply are not well matched. Therefore, Chongqing proposes to build a financial service system for the corridor and initiates an ILSTC financial service consortium.
The financial institutions in the consortium will share service networks and credit information, smooth financial credit within the consortium, and realize coordination of credit information of Chinese and foreign capital, offshore and onshore finance markets, and institutional networks.
Meanwhile, the consortium will empower commercial credit with financial credit, explore the development of a market transaction network and service system covering all the regions and countries along the corridor, work to address such problems as transaction information asymmetry in the cross-border economy, trade, and investment, difficulty in obtaining credit granted to non-resident clients in financial services and fragmented financial services in the corridor, and improve cross-border supply and demand matching and service efficiency, in a bid to boost trade, investment, and industrial development.
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