The development of treasury systems is increasingly seen as a key method for state-owned enterprises to deepen reforms and strive towards becoming world-class enterprises. The Industry-Finance Treasury Forum, hosted by Linklogis Inc. (09959.HK, hereinafter referred to as “Linklogis”), was held in Beijing on November 16, 2023. With the theme “Linking the Future: A New Era in Industry-Finance Treasury”, the forum gathered over a hundred leaders, financial heads, and experts from various sectors, including state-owned enterprises, financial institutions, and industry associations. They convened to discuss diverse topics such as the essence, element allocation, innovative measures, and development trends in industry-finance treasury development.
The forum centered on pioneering practices and innovative approaches in building treasury systems. It aimed to combine the collective power and insights of participants to develop a valuable “Treasury Construction Road-map” for state-owned enterprises, guiding them towards becoming world-class enterprises. Furthermore, it endeavored to offer scientifically grounded decision-making support and introduce innovative management models for the development of corporate treasuries.
Progressing towards Integration of Industry and Finance, and Digital Intelligence, Multiple Trends Spark a Wave in Treasury System Development
Since 2022, the State-owned Assets Supervision and Administration Commission of the State Council has successively released a series of policies including the “Opinions on Promoting the Accelerated Construction of Treasury Systems and Enhancing Capital Management in State-owned Enterprises”, “Guiding Opinions on Accelerating the Construction of World-Class Financial Management Systems in State-owned Enterprises”, and “Notice on Benchmarking Value Creation Actions Against World-Class Enterprises”. These documents highlighted the focus on developing treasury systems.
In the keynote speech, Ji Kun, the co-founder and president of Linklogis, analyzed the evolution of modern treasury management compared to traditional approaches. He emphasized the transformation in various aspects like philosophy, mechanisms, methods, and organization, underscoring the need for a holistic improvement in managing financial resources of enterprises. Ji Kun highlighted that treasury solutions should cater to the comprehensive needs of large enterprises, encompassing management, decision-making, transactions, and industry empowerment. The goal is to seamlessly connect traditional treasury systems with financial service platforms, creating an integrated ecosystem of “one chain, one flow, one circle”, namely, combining the industry chain, transaction flow, and financial circle to ensure effective visibility, control, adaptability, and utilization of corporate funds.
Ji Kun emphasized that Linklogis targets the pain points and complexities inherent in corporate treasury management to develop sophisticated industry-finance treasury solutions with its cutting-edge technological infrastructure and rich operational experiences. Linklogis’ solution is designed to aid conglomerates in refining and enhancing their treasury system in fund operations, risk monitoring, data integration, and investment and finance management. Currently, the self-developed smart industry-finance treasury solution of Linklogis is composed of several key modules, including a Decision Management Center, Data Analysis Center, Product Trading Center, and Technology Interaction Center. Employing advanced technologies such as artificial intelligence, blockchain, big data, and cloud computing, this solution is designed to resolve challenges like information silos and application systems barriers that exist in the development of of treasury management.
It’s noteworthy that supply chain finance is an integral part of the treasury management system. Xu Yuxin, Deputy General Manager of CCCC Capital and Chairman of CCCC Commercial Factoring, pointed out, “The corporate treasury system is a digitized system for financial management, oversight, and coordination, primarily characterized by the centralization of funds and information. Integrating a supply chain finance platform in building the treasury system can not only address the financing difficulties of SMEs and the imbalances in the supply chain but also optimize the consolidation of financial resources, enhance the overall competitiveness and cash management performance of the entire industry chain and supply chain.
Cai Fang, Deputy General Manager of the Inclusive Finance Department at the Agricultural Bank of China, discussed the interplay between building a treasury management system and developing supply chain finance. She suggested that enterprises can leverage supply chain finance as a strategic starting point and breakthrough for building their treasury systems, which will lead to more centralized, effective, and secure fund management while deepening the integration of business and finance. Presently, the construction of treasury systems is emerging as a new scenario for connecting the businesses and demands between banks and enterprises. She explained, “The establishment of corporate treasuries lays the groundwork for the implementation of supply chain finance, with supply chain finance serving as both a facilitator and accelerator in the establishment of a smart industry-finance treasury system."
Envisioning the Future of Treasury, Several Industry Leaders Discuss the Opportunities of Digitization
Several industry leaders from state-owned enterprises and financial institutions participated in the round-table discussion on “Future of Industry-Finance Treasury”. They deliberated on pivotal issues, including the relationship between treasury development and supply chain finance, as well as the development of digitization wave. They emphasized that for achieving high-quality growth, enterprises and financial institutions must prioritize the development of treasury system, and leverage a combination of software and hardware technologies in the era of digitization to usher in a new phase of industry-finance treasury.
The integration of digital technology and real economy is a new trend that offers substantial opportunities for the financial sector, with treasury management emerging timely in response. Chen Jie, Assistant General Manager of the Business Department at Shanghai Bank, noted that the swift advancement and massive application of digital technology have revolutionized inclusive supply chain finance, promoting a positive cycle across the entire industrial chain. He views the development of smart treasury systems as not only advantageous for anchor enterprises and SMEs within the industry chain but also as a pivotal chance for financial institutions to explore new service scenarios and access new resources. Besides, banks should embrace digital opportunities to maximize their strengths in financial services, technological innovation, and ecosystem integration.
Wu Dongliang, Deputy General Manager of Hubei United Capital Investment and Chairman of Gongjian Factoring, explained that as a provincial state-owned enterprise in Hubei province, their priority is to deploy credit and financial resources to support SMEs within the industry chain. He noted that the growth of supply chain finance has brought new opportunities for SMEs. Wu aspires that with the advancement of treasury systems, resources from various sectors should be genuinely channeled towards SMEs, enabling them to enjoy the same level of credit facilities as anchor enterprises, which will significantly increase the value of developing treasury systems.
Sun Jie, Deputy Secretary of the Party Branch and General Manager at Cloud Chain Technology (a subsidiary under State Power Investment Corporation), highlighted that building a digital supply chain finance platform and developing the group’s industrial chain are interlinked and mutually beneficial. He emphasized the importance of ensuring smooth financing for SMEs within the industrial chain to foster high-quality growth of both the industry chain and supply chain. Additionally, he pointed out that the adoption of advanced technologies can considerably improve the ability of data governance, unlocking the potential value of data. “Under the current trend in treasury system development, we leverage advanced digital technologies to integrate information, logistics, capital, and business flow, which enhances the supply chain, reshapes the industrial chain, and creates new value chains, and promotes a profound synergy between industry and finance,” he explained.
Shen Yang, the vice president of Linklogis, emphasized the paramount importance of building a treasury system that integrates finance and industry, particularly for conglomerates, and it is essential to build an industrial chain ecosystem that meets the evolving demands of the new era. In his concluding remarks at the roundtable discussion, he said, “The development of treasury system is vital for enterprises and is progressing rapidly on a global scale. However, the journey ahead is long. Our goal is to transform the supply chain into a mutually beneficial chain, fostering collective efforts to drive the evolution and growth of the treasury system.”
As the host of this forum, Yang Qiang, the vice president of Linklogis, summarized at the conclusion of the forum, “The construction of treasury system marks a significant leap for companies transitioning from cash management to synergistic growth of industry and finance. It is foreseeable that the demand for treasury construction will be further deepened, aiming to foster the integration of industry and financial capital. He said, “The establishment of a treasury system holds substantial strategic importance for the growth of enterprises. I eagerly await our collective efforts to create a world-class treasury system, which will underpin the establishment of world-class enterprises.”