Research On Structural Trade Financing Of Commodity

Over the past few years, international and domestic trade for commodities has been expanded rapidly; the trend of the economic globalization has developed quickly. So the traditional trade finance pattern could not meet the requirement of the customers for information flow, cash flow and logistics. China is the world’s largest copper consumer, the first big steel consumer, the second largest oil consumer, and leading country in commodity production and consumption field. The development trend in trade volume and amount bring not only the huge opportunities to commercial bank in trade financing areas, but also the challenges in the traditional trade settlement way. Thus, many multinational financial institutes set structure trade finance, an advanced financial product, to serve the commodity trading company or manufacturer.Structure trade finance is the result of trade finance innovation. It not only can offer finance service to the companies, but also can control the risks at every trade step. Why is it special? How does it do to reaches the target of satisfy the customers? How could it amend some defect of traditional financing pattern? Is current structure finance perfect? If not, how could we improve it? That is the questions this thesis is studying.This thesis mainly focuses on structured trade finance from point of view of both banks and the trading companies. It is discussing why banks favor this new product according to the traditional trade theories and the practice of foreign banks. I also introduce some examples of real trading deals that how structure finance make profit to the companies. Meanwhile, I share some cases that some structure finance products prevail in foreigner countries, but why they are prohibited in China. I also share my innovation ideas to find some new products with Chinese characteristics.