Joining Forces to Secure Trade

China is a powerhouse in world trade. At this critical juncture during the ongoing battle against coronavirus in China, HSBC is doing its utmost to help trading companies keep running their businesses smoothly in import, export and domestic trade in China, in a bid to help win the battle by lending a boost to the economy.

A Firm Grip on the Food Basket

This past spring festival, an untypical one, turned out to be an ultra-hectic holiday for a major state-owned food company who has a core mandate from the central government to provide most-needed daily necessities for the entire country during nationwide epidemic outbreaks. To support people's livelihood with abundant daily supply, the company imported large quantities of fresh meat products during the spring festival to ensure stable supply to key projects and across China.

To manage fresh meat import of such proportions within a short period of time usually involves huge amounts of work for banks to process trade documents under severe time constraints. It would be a daunting challenge even in normal times let alone nowadays. Moreover, restrictions on working conditions during the coronavirus outbreak made it even more difficult to process these documents on site. Out of concern for our client, the team from Global Trade & Receivables Finance of HSBC China, with safety measures, began to work at full speed to process relevant import documents on 3 February when the extended national holiday was not yet over. Together, within just a few days, the team reviewed over 100,000 pages of documents and processed more than 2,000 import transactions with a combined value in excess of 1 billion yuan. In doing so, the team made their own contribution to the anti-coronavirus battle.

A Commitment to International Trade

China's coronavirus outbreak bears on the world economy as well as the global supply chain. FarmaSino Pharmaceuticals (Jiangsu) Co., Ltd (hereunder referred to as "FarmaSino") is a developer, manufacturer and distributor of finished drugs, bulk pharmaceuticals, and intermediates & chemicals that are sold in China and more than 60 other countries and territories.

Mrs Ding, Operation Manager at FarmaSino would never expect herself to be distraught over the courier service. The company was originally scheduled to submit a batch of export documents after this year's spring festival but then found itself potentially unable to do so on schedule due to international service disruption wreaked by the epidemic for some couriers. Any delay in submission would expose the company to the risk of contract violation, jeopardizing downstream producers overseas, as well as the company's reputation in global supply chain and its cash flow. HSBC Nanjing Branch took FarmaSino's challenge as its own, through the quick check within HSBC network, the branch identified a courier in Suzhou whose international service was still in operation.  The company's documents were immediately delivered to HSBC Suzhou Branch from Nanjing, and were successfully couriered overseas to have ensured the contract would be performed on schedule.

The resolution of this crisis has contributed to FarmaSino's smooth-running of its global supply chain. Chinese companies will continue to play an important role in international trade.

A Breakthrough out of Crisis

Trade in services is emerging as the new trend of global trade. While the epidemic is disrupting physical production and trade activities, it is essential to identify new growth opportunities for trade.

Because of the ongoing epidemic, most businesses and schools have postponed their re-opening day. As a result, user demand for online services surged almost immediately, which also pushed up requirements from online service providers for banks' trade services.

HSBC has long been a firm supporter of start-ups in the new economy. When the Bank's Shanghai branch received a request for additional funding from a client in early February, our teams worked seamlessly together and completed account opening, credit approval and disbursement of 90 million yuan in trade finance for the company within the first week of February. Ultimately, we successfully fulfilled our client's demand for trade finance with timely and reliable support.

Florence Tan, Managing Director and Country Head of Global Trade & Receivables Finance at HSBC China, said, “HSBC has recently announced relief measures for companies in the Hubei Province. Our team is communicating closely with our corporate clients there and trying to deliver this initiative on the ground as efficiently as possible. At the same time, we are also rendering full support for epidemic-hit companies elsewhere in China with more flexible, diverse and rapid solutions tailored to their own needs. We'll stand hand in hand with our clients and battle through tough times in solidarity.”

HSBC China has launched three relief measures in trade finance and working capital loans to support the hardest-hit.

  • The Bank will provide repayment flexibility to its clients in Hubei by extending their existing corporate loans. For clients with working capital loans or buyer trade loans maturing between now and end of March, the Bank has pre-approved extension,enabling them to repay in April. During the extension period, no additional fee or penalty interest will be incurred. Clients can also choose to repay their loans at the original maturity date.
  • As from 17 February till the end of March, corporate clients in Hubei are waived of amendment fees on import Letters of Credit (LC).
  • As from 17 February till the end of March, the handling commissions on our Hubei clients' export bills will also be waived.

Aside from these measures, HSBC will provide bespoke solutions based on each client's needs. At the same time, the Bank will also provide additional trade and receivables solutions for companies affected by supply chain disruptions.

At the same time, Florence also said HSBC's digital banking solutions for trade finance are currently playing an active role in helping corporates keep all their businesses running as usual without having to step out of the door. For example, Guangzhou Pharmaceuticals Corporation and Guangzhou Lotus Supermarket Chain Store Co., Ltd, by leveraging HSBC's online supply chain finance platform, have successfully fulfilled their suppliers' needs across China when the whole country is still in telecommuting mode. The digital platform provides a completely dematerialized environment where loan applications are approved within one working day after submission. As a result, even during the extended holiday, the two companies could still make financing arrangements and replenish their stock in a way that also helped to address pressing needs for many of their SME suppliers.

HSBC offers digital banking solutions across multiple channels, platforms and trade service categories as a reliable and tech-enabled connect with our clients,helping free clients from disruptions caused by the epidemic.Detailed solutions include:

  1. HSBCnet, an easy-to-use internet banking interface that allows transaction application, authorisation and enquiry across the following trade services:
    • Import LCs, import loans, guarantees
    • E-draft acceptance, discounting, endorsement, pledge and collection.
    • Supply chain finance
    • Receivables Finance
  2. HSBC Mobile App and HSBC China Corporate Banking WeChat Service Account that enable access to the following services on mobile devices:
    • Authorisation of import LC transactions
    • Transaction status and summary of LC's, collections, guarantees  and trade loans. Authorisation of import LC transactions.
    • Notices of trade transactions via HSBC China Corporate Banking WeChat Service Account. Real-time tracking of export documents. Inquirying with Xiao Hui, a virtual assistant chatbot.
  3. H2H: HSBC's Electronic Commercial Draft System API, designed to enable host-to-host connection between the financial systems of corporate clients and the Bank, through which  e-drafts requests can be transmitted in real time  and processed without manual intervention.
  4. Swift for Corporate, which allows clients to raise and authorise  LCs and guarantees applications via SWIFT using the industry-standard format

Although the epidemic is still ravaging now, we believe trade will keep running. Let's stay focused and look far ahead. HSBC will stand in solidarity with all of our corporate clients to embrace the first gleam of spring that is to come

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