Financial tools assisting in domestic production upgrade under BRI

During the recent 17th BRICS Summit in Brazil, Sun Yu, president of the ADIB Holdings, shared his insights on financial innovation, international cooperation and the development of digital renminbi in the following interview:

Q: Could you please elaborate on how financial tools specifically assist in optimizing domestic production capacity and balancing international demand, and how closely this is related to the Belt and Road Initiative?

A: Domestically, financial tools can play a crucial role in resource allocation. For example, through credit policies we can guide funds to flow toward emerging industries and traditional industries with upgrading potential, so as to support enterprises in technology upgrades and equipment updates to enhance the quality and efficiency of production capacity and phase out outdated production capacity. In terms of international demand, financial tools can provide funding support for enterprises to expand into overseas markets, such as providing export credits and trade financing and helping enterprises become more competitive in the international market, thereby aligning domestic production capacity with international demand. The BRI provides a broad platform and opportunities for such alignment. The countries involved in the BRI have diverse demands, and we assist their domestic enterprises in participating in infrastructure construction and industrial cooperation projects through financial tools. This helps to absorb domestic excess production capacity and meet the development needs of those countries, achieving mutual cooperation. For example, through services such as financial leasing, we provide a large number of Chinese-manufactured products like new energy vehicles, photovoltaic power equipment, and port and mining machinery to countries involved in the BRI, to enhance their economic development. This cooperation is mutual as it aids the development of other countries while promoting the adjustment and optimization of our economic structure, enabling our enterprises to grow on a broader international stage and forming a virtuous cycle.

Q: You also mentioned investing in the construction of global logistics pre-positioning warehouses to provide precise cross-border supply chain financial services. What specific roles do you think investing in the construction of global logistics prepositioning warehouses play in providing cross-border supply chain financial services?

A: Construction of global logistics prepositioning warehouses is of great significance. First, pre-positioning warehouses can shorten the delivery time of goods and improve the timeliness of cross-border trade. Goods stored in pre-positioning warehouses near the target market can be quickly dispatched once an order is placed, which can reduce transit time and uncertainty. For cross-border supply chain financial services, this means reduction of risk. With faster turnover of goods, fund retrieval will also accelerate accordingly, allowing financial institutions to assess and control risks more accurately, thereby providing businesses with more precise credit limits and suitable financing solutions. Second, the operational data of pre-positioning warehouses, including inventory data, and inbound and outbound data, can provide rich information for financial institutions. By analyzing this data, they can gain in-depth insights into the operational status of businesses and supply chains and provide customized financial services based on the actual needs of the enterprises, achieving precise cross-border supply chain financial services. We at ADIB have prepared specialized financing services for overseas logistics warehouse construction for cross-border e-commerce.

Q: With the rapid development of the digital economy, management and trading of digital assets is becoming increasingly important. You have spoken about the necessity of establishing a management and trading mechanism for tokenizing digital assets. Could you elaborate on the importance of establishing this mechanism for the development of the digital assets and share some of the specific implementation paths?

A: Establishing a management and trading mechanism for tokenizing digital assets is an inevitable trend in the development of digital assets. In terms of significance, tokenization can standardize complex digital assets, making them easier to trade and circulate, thereby enhancing their liquidity. Additionally, by establishing standardized management and trading mechanisms, market transparency and credibility can be enhanced, thereby attracting more investors' participation while promoting the healthy development of the digital asset market. In terms of implementation paths, first and foremost, it is essential to clarify the definition and classification of digital assets to provide a clear foundation for tokenization. Second, it is necessary to establish a comprehensive technical platform utilizing technologies like blockchain to ensure the security, transparency and tamper resistance of the tokenization process. Furthermore, appropriate laws and regulations and regulatory policies need to be formulated to regulate market order and mitigate risks. Additionally, self-regulation of the industry should be strengthened, to help standardize and normalize the management and trading mechanisms of digital asset tokenization.

Q: You have proposed coordinating with the establishment of China's Digital Currency Electronic Payment system to build global application scenarios and circulation methods for digital RMB. Currently, digital RMB has been piloted in many domestic applications. In your opinion, what key issues need to be addressed in the global promotion of digital RMB, and what feasible strategies are there?

A: In promoting digital RMB globally, the first issue to address is building trust. It is necessary to make the international market understand the security, stability and reliability of digital RMB.This requires strengthening publicity and communication to the international community. Second, there is the issue of technological compatibility. Ensuring digital RMB is compatible with various global payment systems and technological platforms is crucial for its international usage. Additionally, there is the challenge of regulatory coordination. Cross-border circulation of digital RMB involves different countries' regulatory policies and legal systems, which need enhanced regulatory coordination and cooperation. In terms of strategy, we can start by focusing on countries and regions involved in the BRI. By combining local trade and investment needs, we can establish application scenarios for digital RMB and gradually expand its usage scope. Furthermore, collaborating with international financial institutions to jointly promote application of digital RMB in international payment and settlement fields is crucial. Additionally, organizing international seminars, training sessions and other activities to enhance international exchanges and cooperation, conducting regional application tests and increasing awareness and acceptance of digital RMB in international markets need to be priorities.

Q: In recent years, financial innovation under the concept of Web3.0 has attracted significant attention, especially in areas such as Real World Assets financing and stablecoin issuance. As a member of the orthodox financial national team, what strategic considerations does ADIB have in this regard? Could you please discuss specific attitudes and measures?

A: The global discussion around stablecoin issuance is heating up, and we are closely monitoring these developments. ADIB has adhered to the fundamental purpose of serving the overall financial development of the country and safeguarding financial security. In the exploration of financial innovation in the Web3.0 era, we uphold the dual principle of encouraging innovation while managing risks. We believe Web3.0 technology provides new possibilities for financial innovation. If RWA financing can be applied reasonably and regulated appropriately, it can help facilitate integration of RWA and digital finance. The issuance of stablecoins also needs to be explored within a compliant framework to serve the transaction needs of the real economy. However, such innovations involve multiple complex factors, including blockchain technology applications, cross-border capital flows and monetary credit systems. Any blind advancement that deviates from regulation or overlooks risks may pose potential threats to national financial security and public interests. ADIB maintains a cautious approach in this field and strictly adheres to national financial regulatory policies. Based on a thorough evaluation of technological feasibility, risk control and compliance, we steadily promote innovative practices. ADIB firmly opposes irresponsible hype surrounding Web3.0 financial innovation in the current market and the misleading of the public. Such behavior often exaggerates technological advantages, conceals potential risks and may trigger market speculation and jeopardize the rights of ordinary investors. We have a responsibility to guide the industry in establishing the correct values of innovation. As a professional institution specializing in digital finance research and applications, we uphold compliance standards and promote the deep integration of technology and finance with a rigorous and responsible attitude, so as to truly realize the social value of innovation. ADIB's core position is that financial innovation must prioritize both risk control and national financial security.