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Ma Yuhua: the best combination of industry and finance is in the supply chain finance of industry.

wallstreetclub @ 2019/10/09



Now the integration of production and finance is proposed. In fact, the best combination point is in the industry supply chain finance. When we did TO C, the Internet was dominated by consumption. At that time, it was mainly traffic flow, focusing on eyeballs, not caring about profits. In March 27th, Ma Yuhua, former president of China Merchants Bank and chairman of the board of directors of the Shenzhen International Public Welfare Institute, said so at the 2019 Boao Forum on Asia "finance and economics" themed dinner - supply chain finance and the integration of real economy.

Ma Yuhua believes that the integration of industry and finance has reached the second half, and the upgrading of consumption has promoted the structural adjustment and supply side reform of the industry. This has changed from past traffic realisation to value upgrading, and the transformation from TO C to TO B, and the combination of Internet and industry, is called the industrial Internet.

Ma Yuhua, taking the cooperation between electric business enterprises and iron and steel enterprises as an example, introduces that the traditional supply chain finance should judge the risk of each loan enterprise. After coming to the stage of industrial supply chain finance, the production of vertical building materials and the vertical connections of the Internet will be linked together, and the external data will also be linked to the big data such as the data of industrial and commercial, taxation, justice, customs, core enterprise holding settlement data, credit card consumption data and industrial supply chain scene data. Banks can learn about purchase orders, databases, industry data and so on. They can fully understand the credit risk and bond risk of the industry chain, and then do not need to understand the credit again. I used to look at three meters, water meters, electricity meters, payroll and tax forms, but now these are meaningless. The database is built up, and every day's data are supported by the Internet. In the supply chain finance, banks have two concerns: one is how to identify risks, the other is how to solve costs, and now this problem can be solved.

Below is Ma Weihua Interview record:

Wang Boming: since Ma Hang long is still familiar with this, because China Merchants Bank is doing supply chain finance, so let's talk about it first.

Ma Yuhua: The Swan has disappeared. I think the most important thing for you to disappear after investing is not to engage in supply chain finance. Supply chain finance is not a new concept in itself. What we are discussing today is industrial supply chain finance. Supply chain finance has long existed. Our manufacturing enterprises have upstream and downstream businesses. Generally speaking, the company's business is not just focusing on this enterprise, from upstream to downstream, the whole industry chain, from production to sales, all of which are financial services, so your financial added value is high. This concept originally existed, but at that time, we had a lot of headaches in the supply chain of pure enterprises. For example, the risk problem, it is very difficult for banks to build a risk identification system, and the cost is high. So now there is a supply chain finance in production, which should be the first half and the second half of the Internet development. Internet began my understanding of the consumer Internet, now called the industrial Internet, the consumer Internet is mainly TO C, is to provide consumer services, when I was president, the eyeball is mainly concerned about TO C, so the merchants bank is retail, and when I enter the industrial Internet, I have retired, so I will talk about some logical reasoning, not necessarily right.

Now that the integration of production and finance is put forward, in fact, the best combination point is in the supply chain finance of the industry. When we were engaged in TO C, the Internet dominated by consumption. At that time, it was mainly traffic flow, focusing on the eyeball, not caring about profits. As long as there is traffic, there is the possibility of liquidity, so what it does is different from traditional banking, but it has a great impact on banks. Now it is the end of the second half, and those are all coming to an end. The upgrading of consumption has promoted the structural adjustment of the industry and the supply side reform. This has changed from past traffic realisation to value upgrading, from TO C to TO B, and the combination of Internet and industry, called industrial interconnection.

Combined with industry, there is indeed a very big space. In the past, simple enterprises or simple banks were all alone, and both sides had to pay a lot of costs. Now the combination of Internet technology and the whole industrial chain has a cohesive effect, because there is a core enterprise in the industry supply chain, and the core enterprises are in the middle of the whole industrial chain, with upstream products on the top, and downstream products on the lower side. Enterprises are just like you. The core enterprises should realize a closed operation of production information flow, goods logistics and capital flow, because the core enterprises are running through the middle of the industrial chain, and your upstream enterprises and downstream enterprises should exert more and more influence.

Two days ago, I contacted an electric business enterprise selling electrical appliances. This business enterprise had to buy something to produce goods, and producers of materials needed iron and steel enterprises to provide steel for him. For iron and steel enterprises, these manufacturers had receivables for him. For downstream businesses, they were paying for the goods. Now they are working together, that is, the cooperation between iron and steel enterprises and electricity providers can save a lot.

Wang Boming: how do they work together?

Ma Yuhua: because the electricity supplier needs products now, the manufacturer is able to give priority to its opinions. The manufacturer asks you to use the products of my cooperative Steel Corp, and its products are payable to them, so it pays directly to the iron and steel enterprises, and there should be no arrears between them. After straightening up, it knows all the upstream and downstream businesses, so it knows more about the integrity and production of the enterprises, so that the risk of bank loans can also be controlled.

I went to the enterprise myself. They are now working hand in hand with the two chairmen. This should be the cooperation between the two enterprises to raise the capital efficiency, but the real industry internet finance is more extensive than this concept. Because our current supply chain, originally our traditional supply chain finance to each enterprise loan, must judge each enterprise's risk, becomes the industry supply chain finance later, it actually is constructs in the Internet, connects these horizontal vertical links, external and industrial and commercial, tax, judicial, customs data, core enterprise control settlement data, credit card consumption data, industry supply chain scene data, such as purchase order, database, industry data and so on, the bank can fully understand this industry chain credit risk, the bond risk, then the credit does not need to understand again. We used to look at three meters, water meters, electricity meters, payroll and tax forms, but now these are meaningless. The database is built up, and every day's data are supported by the Internet. In the supply chain finance, banks have two concerns: one is how to identify risks, the other is how to solve costs, and now this problem can be solved.

China Merchants Bank is now cooperating with core enterprises. It does not need to develop itself, but cooperates with cooperative enterprises. This can save a lot of cost. These things are extending along with the development of the Internet, which is also a new development trend of the industry. But there is no doubt that the lines in the upper and lower reaches of the most financial enterprises are very good.

Wang Boming: Thank you for your advice.

Ma Yuhua: the industrial supply chain is not an enterprise. First, it has a core enterprise. The core enterprise has upstream and downstream, supply and sale, and it has to build its own ecosystem. This ecological circle should coincide with the financial ecosystem.

Wang Boming: the most fundamental question is who will get loans in the end. There is a company. There must be many companies in the industry chain. What is a company taking loans or some companies taking loans?

Ma Yuhua: not one.

Transferred from Wudaokou Supply Chain Research Institute source financial network

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Chinese:马蔚华:产融结合最好的结合点在产业供应链金融上