Today, China’s Sina reported that multiple leading banks released new blockchain features for the ‘Shanghai International Trade Single Window’ platform. The announcement was made by the Shanghai branches of the Bank of China (BoC), Industrial and Commercial Bank of China (ICBC), Construction Bank, Agricultural Bank, and Bank of Communications.
Banking giants
The first four are the largest banks in the nation and, according to the Forbes Global 2000, the ICBC is the biggest company in the world.
The platform is run by the city’s Port Office and combines institutional trade services in one place. As of today, businesses can use it for cross-border financing, medical supply chain traceability, customs supervision, and integrating third-party trade. These new features were developed with Shanghai’s People’s Bank of China (PBOC) branch, Drug Supervision Bureau, local customs, and the BoC and ICBC, respectively.
Today’s announcement also revealed that the parties established the ‘Shanghai Electronic Port Blockchain Alliance’, aiming to apply blockchain to improving customs and interoperability.
Indeed, blockchain is used in each of the new applications. In cross-border finance, it is utilized for post trade processes and to reduce risk and costs. The pharmaceutical blockchain allows for end to end traceability and reliable data. In customs and third party trade, the technology stores information immutably in one transparent platform, increasing efficiency and data accuracy.
China’s one-stop shops
Shen Weihua, deputy director of the Shanghai Port Office, said: “international trade has a long chain of business, many parties involved, complicated processes, lengthy trading cycles, lack of transparency in information, high transaction risk and high communication costs, and deep trust and efficiency problems.”
“Therefore, the Shanghai Port explored and innovated in the process of enhancing trade facilitation, introduced blockchain technology, and worked hard to solve the above problems and made positive progress,” he continued.
The ‘one-stop shop’ for international traders is one of many across China, known as ‘Single Window’ platforms. However, Shanghai is one of the leaders, with ten separate functions combining 22 departments.
“World Bank experts highly value Shanghai’s single window of international trade, and believe that its functional complexity and business processing volume have been ranked among the best in the world and promoted to countries around the world.” said Weihua.
The deputy director of Shanghai customs, Ye Jian, agreed: “By using the characteristics of blockchain technology, such as distributed accounting, shared ledger, multi-party verification, and non-tampering, […] the whole process is transparent, and the imported goods purchased by consumers can be traced back to the source.”
Another single window system was launched recently in Chengdu, also involving the ICBC. This week it reportedly expanded operations to Africa, while China Construction Bank (CCB) moved into Taiwan. The CCB also released a new version of its $50 billion trade finance platform last month.
Both banks are members of the China Banking Association trade finance blockchain, and the PBOC and BoC each have their own.
