Chairman of Xinxin Group, Fu Shubing, accepts our exclusive interview
Recently, the Nanjing economic and trade delegation, led by Deputy Mayor Zhao Xiaojang, has concluded a one-week business investigation in New York. During the investigation, the delegation held a service outsourcing promotion meeting at the Queens Grand Hotel in Flushing, New York, conducted multiple business activities, and had extensive contact with local industrial and financial sectors. As one of the members of the investigation team, Fu Shubing, chairman of Jiangsu Xinxin Investment Guarantee Group Co., Ltd., accepted our exclusive interview regarding this American investigation.
Reporter: Please introduce the situation of the delegation's trip to the United States.
Fu Shubing: In addition to government officials, the delegation also included more than 10 private entrepreneurs led by Chairman Li Bing of the Nanjing Federation of Industry and Commerce. This fully demonstrates the emphasis placed on the private economy by the Nanjing Municipal Committee and the municipal government. Entrepreneurs going abroad can broaden their horizons and introduce capital and seek business opportunities through direct exchanges with foreign financial and industrial circles. The entrepreneurs who went with me generally felt that the trip to the United States opened their eyes and was highly beneficial.
In terms of business activities, under the assistance of the China General Chamber of Commerce in the United States, the delegation held a service outsourcing promotion meeting. Vice Mayor Zhao Xiaojang introduced the development of Nanjing's service outsourcing industry at the meeting. Nanjing is currently one of the 20 service outsourcing demonstration cities in China. Last year, the actual total amount of its service outsourcing industry was $1.3 billion, ranking first in growth among the 20 demonstration cities. It is expected that the total outsourcing amount for the whole year will reach $1.7 billion. The delegation also visited Wall Street in the United States, communicated face-to-face with many people from the financial sector, and paved the way for attracting investment.
Reporter: What was your biggest gain from this trip to the United States?
Fu Shubing: During our visit to the United States, we visited Wall Street. The developed state of the American financial industry and the completeness of the financial system left a deep impression on us. At the dinner of the promotional event, I exchanged views with David Smith, vice president of the American Colliers Bank, and Rich Dee, partner of the American United Venture Capital Company. They introduced the latest trends in the American financial industry to me. Currently, financial capital in the United States is very active, looking globally for projects worthy of investment, especially favoring the Chinese economy which stabilized and rebounded first after the financial crisis. Like domestic venture capital, overseas capital does not lack money, but lacks good projects. They hope to establish connections with China's local financial and industrial sectors through some business activities. Over the past three years, Xinxin Group has provided financing guarantee services to more than 800 small and medium-sized enterprises, including many high-tech enterprises with growth potential. Xinxin Group can act as an intermediary to introduce overseas capital to promote regional economic development.
From 2005 to 2007, there was a wave of Chinese companies represented by Suntech Power listing on NASDAQ. With the warming of the global economy, Chinese companies going public overseas are starting to heat up. Xinxin Group is willing to become a platform connecting Chinese industries with overseas capital, introducing excellent domestic companies to major American investment banks, helping domestic companies obtain development funds, and allowing foreign financial institutions to share in the fruits of China's economic development.
Banks are the core of China's financial system, and credit policies are of concern to all sectors of society. How does the United States use credit policies to provide impetus for economic development?
Fu Shubing: The United States has established multi-level policy financial institutions to meet the funding needs of economic development. Taking rural finance as an example, since the 1930s, the United States has successively established the Export-Import Bank, agricultural credit institutions, and housing construction credit institutions, etc. Among them, there are various types of agricultural credit institutions, including the Farm Credit Bureau and its affiliated Federal Land Bank, Federal Intermediate Credit Bank, Cooperative Bank, and Commodity Credit Corporation, etc. The Federal Land Bank mainly issues long-term mortgage loans of 5-40 years to farms; the Federal Intermediate Credit Bank provides medium and short-term loans of half a year to 3 years; the Cooperative Bank only provides loans to farms participating in cooperatives; the Commodity Credit Corporation supports agricultural product prices by providing agricultural product mortgage loans to farmers; while the Farm Credit Bureau mainly issues loans of various terms to individual farms without other credit sources. It can be said that the American financial industry provides multi-level financial products for the real economy and plays a huge role in the development of the real economy.
Xinxin Group is a professional institution providing financing guarantees for small and medium-sized enterprises. Are there any aspects worth learning from the United States in solving the problem of financing difficulties for small and medium-sized enterprises?
Fu Shubing: The difficulty of financing for small and medium-sized enterprises is a worldwide problem. The United States mainly relies on continuous innovation and rapid expansion of the capital market to provide an increasingly relaxed environment for enterprise financing. The innovative development of the capital market has prompted a shift in the financing philosophy of American enterprises. Enterprises enter the capital market to issue corporate bonds, meeting their own financing needs through the issuance of bonds, which has also significantly changed the debt structure in the United States. Additionally, most merging enterprises raise funds by issuing large amounts of new shares.
Compared to traditional financing methods such as bank lending, the flexible and diverse financial innovation tools of the capital market provide more options for American enterprise financing. It is well-known that risk investment in the United States is developed, not only providing funds for enterprise development but also promoting industrial upgrading. To alleviate the financing difficulties of Chinese small and medium-sized enterprises, guarantee institutions can play an important role. At the same time, the capital market should accelerate its construction and innovation steps to provide more direct financing channels for enterprises. The launch of the Growth Enterprise Market in October is just the beginning. There is still much room for China to help enterprises raise funds through the capital market.
How did this investigation in the United States inspire your thinking about running the company?
Fu Shubing: The financial innovation and capital operation capabilities of the United States have left a deep impression on me. As early as September this year, Xinxin Group decided to pursue industrial upgrading, and this trip to the United States has further strengthened my determination. Specifically, the company will establish a complete financial industry service chain. Eggs should not be placed in the same basket. From financing guarantees to asset management, and then to venture capital, the company will maintain stable development of its financing guarantee business on the basis of integrating current resources, providing comprehensive financial services to more small and medium-sized enterprises, and building the company into a brand financial channel service provider. At the same time, the company's future business will not be limited to Nanjing City, but will expand throughout the province. Through the extension of the financial industry chain and the expansion of business scope and scale, Xinxin Group will no longer be confined to a single link in the financial industry chain, but will extend upstream and downstream in the industry, expanding the company's development space and enhancing the overall risk resistance capability of the company.