A Study Of International Factoring In Chinese Commercial Banks: Bottlenecks And Countermeasures

International factoring is one of the comprehensive financial services, which contains services of trade finance, business credit investigation, management of receivables and credit risks guarantee. In the global scope, international factoring has become comparatively mature, but it is just at its starting stage in China.When international factoring was introduced into china in 1990's, many scholars compared it with the letter of credit, collection on documents and remittance. They drew a conclusion that international factoring has its advantage when compared with other services. Although, the volume of international factoring has increased in China in recent years, the improvement is not huge. So, what hinder the Chinese commercial banks to speed up the development of international factoring and how to conquer these difficulties? These problems become the subject which this thesis concentrates on.This thesis mainly consists of five chapters. In chapter 1, the author mainly analyses the relation between commercial banks and international factoring business. From a global perspective, the commercial banks provide international factoring which promotes the international trade. In China, the commercial banks play an important role in the development of this service. First, although some non-financial institutions entered the market of international factoring bissiness, Chinese commercial bank is also the main supplier in this market. Second, Chinese commercial bank is a better choice of supplier to provide international factoring bussiness at present because of its adequate capital and solid relationships with enterprises.Chapter 2 analyses the environment, in which Chinese commercial bank develops its international factoring firstly. Then, it sketches the current situation of the international factoring in China. The conclusion is that international factoring is developing in an environment with unitary supplier and imperfections of related laws and regulations. In this case, the scale of Chinese international factoring is much smaller than developed countries and the commercial banks mainly provide resources export factoring.Chapter 3 is the cornerstone of this thesis, it analyses the bottlenecks and barrier for Chinese commercial banks to develop their international factoring especially from the aspects of risk and pricing. At present, Chinese commercial banks are weak at risk guard when they are developing and applying international factoring business. And the price of international factoring is too high for small medium-sized enterprises (SMEs) in China.Chapter 4 covers comparison and reference of the international factoring business in European countries and Taiwan. In the supplier aspect, Chinese commercial banks may cooperate with the overseas famous financial organ to establish professional factoring corporations. In the service form aspect, the commercial banks should use the international advanced EDI system and the computer network to deliver international factoring services. In the risk guard aspect, Chinese commercial banks may transfer the risks of international factoringto insurance companies by the way of reinsurance. Chapter 5 brings forward corresponding precaution steps and provides some suggestions so as to launch the business successfully. First, commercial bank factors should seize the opportunity of commercial bank reformation and social credit improvement to speed up the development of international factoring business. Second, Chinese commercial banks need to improve their risk guard measure. Lastly, they should eliminate the information dissymmetry in the international factoring business to reduce the service price by using feasible methods.In the author's opinion, there are some distinctive characteristics in this thesis. First, the research angle is innovative. Although there are a lot of academic researches related to the development of international factoring in Chinese commercial banks, they didn't analyses these impediments deeply combined with the new changes of the international factoring business. This thesis considers these changes enough and specially analyses the risk guard and pricing which may hinder the development of international factoring business.Second, the research material has been renewed by translating foreign essays and books. In chapter four, the author summarizes the characteristics of international factoring business in European countries and Taiwan.Third, research approach stresses the application of case analysis and analytic demonstration. The author uses lots of data and practical materials when the thesis analyses the environment in which Chinese commercial bank develop their international factoring business and sketches the current situation of the international factoring in China. In addition, the thesis studys several cases when it anlyses the risks which the commercial banks may encounter when they are developing and applying international factoring business.