Market Trends of China Trade Finance Industry
Digitization Transformation is Driving the Market
Due to the coronavirus impact and compliance requirement changes, the industry transitioned from perceiving early adopters as driving the digital transformation to one where digitization is necessary. The Fintech industry saw exponential growth after Covid-19. China, in particular, saw the highest adoption rates of FinTech in Asia at 69%. FinTech firms in this country are particularly successful at tapping into the tech-literate but, according to the study, financially under-served segments.
Growth of SMEs Driving the Market
China, a global trade heavyweight, boasts substantial imports and exports. Its trade finance market plays a pivotal role in facilitating cross-border transactions for Chinese businesses. This market, largely dominated by banks, sees a prominent presence of state-owned giants like Industrial and Commercial Bank of China (ICBC), Bank of China (BOC), China Construction Bank (CCB), and Agricultural Bank of China (ABC). These banking powerhouses offer an extensive array of trade finance solutions tailored to businesses of all scales. Key instruments in China's trade finance landscape encompass letters of credit (LCs), documentary collections, bank guarantees, trade credit insurance, and export financing. These instruments effectively manage risks for both importers and exporters, ensuring seamless cross-border trade.
