China keeps advancing in the Blockchain zone with aggression. In the latest development, the local government of Shanghai has joined hands with financial enterprises to form a Blockchain alliance to expedite international trade. The aim is to utilize Blockchain applications in accelerating the processes of trade and finance in Shanghai’s E-port area.
The Shanghai Municipal Commission of Commerce, Shanghai Customs and representatives of six Shanghai Banks including the People’s Bank of China and Bank of Communications have signed a written proposal for the mentioned Blockchain alliance at the China International Import Expo.
What This Alliance Will Mean For Trade In Shanghai?
Blockchain technology creates an ecosystem through a shared ledger that everyone in the network can access and edit. Information and data on the network are immutable, making it impossible to hack. There is no central body, as everything happens and gets approved through a consensus between all the participants.
The decentralization and distribution of records and data will help the trade participants to coordinate efficiently with each other. It also improves trade relations through transparency in transactions.
According to Chen Huifang, Professor, College of Information Science and Electronic Engineering of Zhejiang University,
“Blockchain technology increases the reliability of the information, thus improving the efficiency of customs clearance, reducing costs and promoting trade facilitation.”
The Current Blockchain Scenario:
To enhance trade convenience and efficiency mutual trust among traders, Blockchain applications have been incorporated in multiple free trade zones in China. The government believes that Blockchain-based transactions will improve the mutual trust and reliability between traders.
“This is the first Blockchain application project in customs and the first service project for CIIE. China upholds multilateral trade and constantly improves its business environment by seeking technological innovation”…
…said Ye Jian, official, General Administration of Customs of Shanghai. Blockchain has been incorporated by several Shanghai-based businesses involving digital supply chain, digital insurance, IoT, etc.
Backed by Blockchain, the newly launched cross-border yuan trade financing services of Shanghai is already showing great results by resolving the information imbalance issues in trade financing.
Shanghai’s Blockchain-based trade alliance comes closely after Chinese President, Xi Jinping, recently asked his countrymen to embrace Blockchain technology to accelerate technological innovation.