On the commercial banks in international trade finance business

On the commercial banks in international trade finance business Paper Keywords: international trade finance; Commercial Bank Abstract: In a brief introduction of international trade finance in the development of Chinas commercial banks on the basis of further analysis of its current outstanding problems and put forward policy proposals targeted. International trade finance, commercial bank credit, the most common varieties of the traditional one of its international trade, international settlement closely linked. International trade financing is an importer or exporter to provide banks with the import and export trade-related loans. On the one hand, it yields a high profitable, with comprehensive benefits, the effective use of modern banking capital an ideal way; the other hand, it effectively solve the enterprise engaged in import and export trading activities are facing a shortage of funds enhanced the advantage in the negotiations, making possible a wider scope and larger scale development of international trade; the same time, it is also an integral part of national trade policies is to encourage the active export of one of the means, not only can be adjusted import and export structure, but also for a countrys participation in the international economy can play a catalytic role. Especially at this time of financial crisis raging, international trade financing, the use of rational development, business-to-bank will be of great importance. Chinas banking trade finance business began in the 20th century, generally carried out since the mid-90s, with the continued prosperity of our national economy and import-export trade, while greatly expanding the scale of the development. According to statistics, Chinas foreign trade import and export value in 2007 was 85 times more than in 1978, has Wenju third in the world. According to Customs statistics, between 2001 to 2006, Chinas foreign trade increased by 179% in 2007, up 23.8%, of which exports grew 27.2%, imports grew 20% year to achieve the scale of 176 million U.S. dollars of trade import and export trade growth , making the increased demand for business-to-bank financing, the development of trade finance business for the bank provides a broad market. But as a whole, international trade financing business development is still slow, the amount of international trade finance bank loans accounted for only 3% of the ratio can be discerned, corresponding to trade finance income in the banks total income is also negligible, while some foreign banks, the business has accounted for four Bacheng revenue. Concrete analysis of the current existence of Chinas international trade finance more prominent issues: An international trade finance business of credit approved by the size of arbitrary strong, and standards differ The banks of the approved scale of international trade finance credit standards are very different, and some banks will be treated as working capital loans for the financing of international trade processing, and some banks under the financing of different varieties of a certain multiple of amplification, financing, formulation of policies more is based on its understanding of international trade financing, the lack of in-depth scientific research. In the understanding of international trade finance and risk control, the Chinese-funded banks and foreign banks have obvious difference, such as packing the traditional business loans, foreign banks in the operational processes and procedures, we should simplify much, they are more The author: Zhao, Shanghai University of Finance and International Business School of Management, International Trade 07 Master-oriented trade, by controlling the whole process to achieve the purpose of risk control, and not overly concerned with the size and strength of the enterprise itself. In contrast, domestic banks in international trade finance products are relatively uncommon process design science, cumbersome procedures, operability is not strong. 2 enterprises to apply for financing of international trade is difficult existence of a security problem On the one hand companies are looking for third-party guarantee, we will worry about the other party in the future will be asked to provide their own security and, thus, its difficult to control risks; the other hand, some of the applications of international trade finance business for the trading companies, the lack of authorization as a bank of fixed assets, such as the plant, land and other production-type machinery and equipment while export enterprises can be used for collateral, but the mortgage rate is low, and high cost, procedures cumbersome, time-poor, non-compliance with international trade financing convenient features; third, enterprises in international trade financial products are not familiar with the various financial instruments can not be a reasonable manner. In the banking products, constantly updated, the new international trade financing abound circumstances, most companies can not work well with their actual conditions, select the appropriate operating characteristics of the enterprise business products, various types of financial products can not be applied flexibly. Three risk control methods are backward International Trade Finance business risks involved in customer risk, country risk, foreign correspondent bank risk, the international market risk and the internal operational risk. The risk management needs of these advanced techniques will be bank-related departments, sub-branches link between the organic and efficient. At present, Chinas commercial banks in developing countries in international business, especially international settlement business has always been a decentralized business model, is lagging behind foreign exchange business processing system, international settlement and foreign exchange credit, foreign currency credit and accounting run on its own, the lack of network resources sharing and a unified and coordinated management, making it impossible to achieve a shared resource, monitor risks, the purpose of mutual restraint. 4 International trade finance business is simple, new product development efforts is not enough At present Chinas international trade finance their basic business will remain the traditional mode of financing, that is, letter of credit and financing a combination of the main, while the more complex operations, such as factoring, forfeiting operations were carried out is limited. With the banking internationalization, and Chinas accession to WTO, domestic banks and management level in technology, financial services and management methods such as the gap with foreign banks become more prominent, according to statistics of foreign capital bank international settlement business has occupied 40% market share in China about. In recent years, according to market needs, banks have also been introducing new financial products, but the business understanding of differences in their very different business operations, the lack of various forms of financing strict uniform standards, the lack of the operations are relatively standard, the detailed statistics. 5, the object of international trade financing over-centralized By the traditional concept of the impact of credit business, domestic bank financing, business objects, large and medium enterprises focused on quality. At present, the major banks to high quality and large enterprise customers an increasingly competitive, the market has been gradually becoming saturated. And the small and medium foreign trade enterprises in China in recent years has developed rapidly, in Chinas imports and exports about 60% of the total achieved by the small and medium enterprises, engaged in cross-border investment and operating more than 30,000 households in Chinas enterprises, SMEs account for more than 80% SMEs have become an important component of Chinas foreign trade. A common problem for the above, we propose to commercial banks financing international trade policy proposals: reposted elsewhere in the paper for free Download Center http:/ (1) the implementation of adaptation to international trade finance credit characteristics of the size of control methods. International trade finance clients evaluation criteria should be different from that of the working capital loans to clients evaluation criteria. Evaluation more according to the customer before the customs, banks, foreign exchange bureau, industry and commerce, taxation and other handling business records, on this basis, and then refer to the clients financial statements reflect the operating results and overall strength. Banks should proceed to develop an international trade finance customer information management system, has provided customers with detailed business files through business customers and clients understand the counterparties to analyze their actual performance capabilities, in order to provide the basis for international trade finance credit. Depending on the characteristics of international trade finance products to create different discriminant criteria. Different types of international trade finance business risks involved, and the business can provide a guarantee, mortgage or pledge requests are different from the business risk borne by the bank are very different and therefore, the banks should be based on the different international trade finance products the characteristics of developing the appropriate product standards and customers credit criteria. (2) to take to adapt to the characteristics of international trade financing by way of security, content-rich services. First of all, for international trade finance operations and, innovative thinking to develop a strong operational security programs. UNPROFOR by businesses or provide a personal guarantee, or undertaken with the social credit guarantee agencies, for a conditional pledge to provide arrival enterprises may take the pledge of movable property such as accounts receivable pledge, pledge of warehouse receipts and other financing by way of security. Secondly, the full introduction of third-party financial institutions, credit, to a certain extent, circumvent the enterprises are facing market risks, credit risk and country risk importing countries. Third, to encourage export enterprises export credit insurance coverage. Fourth, to strengthen business-related training of personnel to understand the banks trade finance products to understand the characteristics of various products and substantive, timely services to enterprises to promote the appropriate species, to play the role of financial advisers. (3) to establish a scientific system for trade financing, risk management, strengthen risk management. The establishment of risk prevention system, adopt effective means to control risk is the development of international trade financing business in one of the prerequisites. Such as determining the financing conditions and standards, the establishment of risk indicators for monitoring the system, the use of foreign exchange transactions to hedge or reduce risk; improve the hierarchical authority is set to strengthen password management; critical review of the real trading background, seriously in accordance with operating procedures and approval procedures; on a regular basis with the customer communication, tracking business conditions; the establishment of credit and trade finance processing center business unit, focused on a limited commercial banks internal credit business experts, set up an independent credit approval center to assess the customers credit; more focused clearing and trade financing human resources, the establishment of International Trade Finance business in a professional dealing with trade finance business and its business risks may be formed using the advantages of pre-qualified personnel to prevent and resolve after a variety of business risks. (4) update the concept, actively make innovations in international trade finance products. First of all, to be in the traditional international settlement services, such as L / C, collection, letters of credit and other business based on the analysis based on the international market, and constantly develop new financial products. Such as factoring, forfeiting, and other new businesses in our country still has great room for development, the current should be appropriate guidance for trade finance customers demand, and gradually introduce the domestic factoring, forfeiting, bills discounting business market prospects, etc. species. Secondly, international trade finance product design with the combination of trade chain, starting from trade links design products in order to effectively address the enterprises in the procurement and distribution of the funding needs. Again, tailor-made according to customer demand in international trade finance products, traditional ways and new international trade financing methods combine to make the international trade finance services value-added. Also according to customer needs, providing customers, including order financing, chattel mortgage issuing import and export factoring, global Internet collection, on-line issuing different types of innovative products to solve customers in different sectors of trade in the personalized demand, the use of technology platform for enterprises to provide an efficient and effective value-added services. (5) relying on more comprehensive range of products, cultivating a wide range of trade finance clients. With the continuous expansion of Chinas openness, participation in international trade, business groups, also will grow. For commercial banks, trade financing should no longer limit the scope of customer marketing in the traditional foreign trade companies, but should be formed of varying scale and nature of diversity, diverse industry, import and export enterprise customer base. Thus, commercial banks should be based on international trade development trends and the actual needs of Chinas corporate finance to create a marketable product, to achieve product support, business customer marketing as a means to gradually expand trade finance customer base. If the financing under the export credit insurance, based on the co-operation with the China Export Credit Insurance Corporation of export bills introduced under insurance financing, to banks and China signed a letter of protection in the form of insurance to further expand the scope of financing, is not limited to trade under the The import and export business. Import business needs for enterprises, commercial banks can be the importer of goods the right to pledge, with large logistics companies to adopt flexible and diverse way of pledge of warehouse receipts to facilitate enterprises to obtain financing to facilitate, and can be widely used in raw materials, semi-finished products , the import trade in finished products. In short, the commercial banks must always stay in the market front, research firm demand, continued to emerge to form a complete trade financing products, more customers and open up channels for the smooth flow of trade finance. Nowadays the financial crisis sweeping the world, but gradually invade the real economy, a large number of serious cash flow problems of SMEs, commercial banks should be timely aware of international trade financing business in which many problems and seek to improve, turn crises into opportunities, and businesses together, hold tight group, over the winter, for spring, the vigorous development of the power savings. Reposted elsewhere in the paper for free download http:/