The Application Of Supply Chain Finance In Foreign Trade

With the deepening of the reform and opening up, our foreign trade has developed steadily. However, the lack of capital liquidity has always been the primary problem of the foreign trade enterprises of our country, About80%of the import and export enterprises in our country are small and medium-sized enterprises (SMEs), whose contribution to foreign trade can’t be neglected. Because the traditional trade financing could not solve the enterprises financing difficulties, a new way of financing-supply chain finance are widely sought at home and abroad.Different from other traditional financing methods, supply chain finance jumps out of the traditional limitations of a single enterprise, but standing at the height of whole supply chain, emphasizes the real business background of single trade and the strength and credit standing of the leading enterprises, and on this basis banks decide whether to provide finance to the upstream and downstream enterprises of the supply chain. With credit of the whole supply chain enterprises bounded together, it’s easier for banks to research credit status and control risks.After all, compared with the single enterprise financial and credit status, trading between enterprises are much more difficult to fake.Supply chain finance is now one of the most popular innovative products in the finance practice of domestic and international banks, and it has gained much development and utilization in domestic markets of many countries. Supply chain finance encourages effective integration of logistics, cash flow, information flow and business flow of supply chain, and the variety of operation mode can be used in different financing environments, so enterprises can choose the best financing plan according to their own situation. If applied to the foreign trade, not only import and export enterprises,but also logistics enterprises and banks could get benefits from it. In particular, supply chain finance alleviates the plight of financing in import and export enterprises, improves the competitiveness of the whole supply chain, at the same time strengthens the relationship between banks and all enterprises on the chain, specifically, since the upstream and downstream enterprises are incorporated into the system of bank financing, core enterprises will also be attracted to join in, which brings big customers to the bank. In addition, since supply chain finance can not operate smoothly without the cooperation between logistics enterprises and banks, therefore, logistics enterprises can expand business and benefit the whole industry.Currently, the use of supply chain finance in solving financing difficulties of the import and export enterprises is still rarely. Therefore, inspired by the existing literatures, the author hopes to reveal the application status and operation methods of supply chain finance in international trade on the basis of illustrating concept and relevant theories of supply chain finance and foreign trade and trade financing status of import and export enterprises, point out the existing problems and countermeasures, then find an effective way to obtain financing for import and export enterprises. Specific research framework is as follows.The first part was the introduction, it introduced the background, research significance, and put forward the frame structure and research methods on the basis of research results at home and abroad, and pointed out the innovation and deficiencies of the article.The second part was relevant theories of supply chain finance. Firstly introduced the concept, characters and theories of supply chain finance, and then illustrated theories including self-liquidating trade financing theory, structured trade financing theory and transaction cost theory.The third part was the application of the supply chain finance in the import and export trade. Firstly introduced the motivation of supply chain finance applying in foreign trade and differences between home and abroad. Secondly, presented the major participants of the supply chain finance under international trade and then described several application modes in detail, including their respective connotation, business processes and risks, etc. Finally, analyzed the benefits and risks that supply chain finance brought.The fourth part was the application status and existing problems of supplying chain finance in foreign trade. Firstly shew the status of international trade and trade finance, introduced the application status of supply chain finance in foreign trade, on this basis, pointed out the existing problems from angles of banks, enterprises and governments.The fifth part was the countermeasures and suggestions to supply chain finance applying in foreign trade from four aspects according to the developing status and existing problems.The sixth part was conclusion.This paper adopted a variety of research methods on the study of foreign trade supply chain finance, mainly including normative analysis, comparative analysis and so on. These methods are used crossly, and they complement each other and support each other, so that the research process of this paper is more comprehensive and systematic. Hope this research can promote and improve the application and development of supply chain finance in foreign trade.