China State Construction Engineering Corporation: spearheading industry-finance synergy for a robust and collaborative ecosystem

Despite operating all over China and in nearly 100 countries and regions globally, CSCEC has pioneered financial innovation to create far-reaching strategic and operational benefits to its treasury function.

As an industry leader, CSCEC needs a treasury management framework to match. Established in 1982, the company now oversees a network of over 100 secondary holding subsidiaries and more than 1,000 operational entities, managing upwards of 12,000 active projects across 128 countries and regions.

Its diversified portfolio encompasses five core sectors: building construction; infrastructure development; real estate; survey and design; and emerging industries, including green initiatives and digital transformation. CSCEC is renowned for its long history of specialisation in China, including the earliest market-oriented strategies, making it one of the paragons of integrated investment and construction worldwide.

With 300,000 senior managers plus engineering and technical personnel, including over 20,000 financial professionals, the corporation exemplifies operational scale and expertise. As a result, in an era marked by heightened global competition and rapid technological evolution, CSCEC has positioned itself at the forefront of financial innovation.

More specifically, through proprietary innovation and system design, the firm has tackled longstanding industry challenges to build a sophisticated industry/finance management ecosystem. To achieve this, anchored in the principle of external integration and internal linkage, dual-circulation enhancement, CSCEC has unified its credit control chain in terms of supplier/buyer evaluations, its industrial chain in terms of receivables and payables, and its value chain in terms of supply chain finance. In short, the outcome is cohesive resource aggregation and networked efficiency.

External integration and internal coordination: dual oversight via supplier/buyer credit evaluation

CSCEC has leveraged operational data for its suppliers and buyers as raw material for the foundation of rigorous and scientific credit assessments. This provides a cornerstone, or critical mechanism, for the firm to regulate its business activities.

By adopting an external integration and internal linkage strategy, CSCEC can now collaborate with external data providers while internally synchronising its treasury system modules to consolidate partner credit profiles.

This data is processed through a proprietary data field library model and credit evaluation framework, enabling comprehensive risk analysis. The system’s one-click credit risk query functionality delivers pre-emptive insights, presenting over 20 risk indicators across five dimensions: basic profile, transaction history, financial health, legal exposure, and operational stability. Partners are assigned one of five credit tiers based on pre-defined thresholds: excellent, good, watchlist, restricted, or prohibited.

These credit evaluations inform a dual control mechanism governing receivables/payables and supply chain finance. As part of this, CSCEC implements a tiered oversight of partner onboarding, credit limits and payment terms, ensuring proactive source management in terms of receivables/payables. Concurrently, the firm aligns its financial resource allocation with credit ratings, mitigating risk transmitted from the outside to the inside and from point to point – therefore bolstering sustainable growth.

Process optimisation and analytical depth: establishing a unified receivables/payables pool

The effective management of receivables and payables – the key assets of supply chain finance – is paramount to key treasury needs such as financial stability, strengthening cost control, optimising cash flow, identifying customer risks and strategic decision-making.

Ultimately, the integrity of receivables/payables is vital to minimising financial risk. As a result, CSCEC has standardised its receivables/payables processes – a cycle of contract execution, settlement validation and invoice reconciliation – to ensure seamless integration, cross-verified workflows and consistent data standards.

By leveraging advanced data mining and visualisation tools, CSCEC achieves unified oversight and end-to-end traceability. This creates a dynamic, real-time receivables/payables pool, with this data enhancing the precision of partner risk assessments within the credit evaluation system.

There are also three stages of collaboration which can improve the risk management capabilities of key functionalities such as cross-referencing receivables/payables, identifying inter-partner relationships and issuing blacklist alerts:

• Pre-engagement: defining credit parameters
• Ongoing operations: real-time monitoring and batch alerts for payment delays
• Post-engagement: by prioritising proactive risk mitigation and detection of anomalies, CSCEC transitions from taking reactive measures to delivering a forward-looking governance model
• Post-engagement: by prioritising proactive risk mitigation and detection of anomalies, CSCEC transitions from taking reactive measures to delivering a forward-looking governance model

Integrated treasury operations: crafting a secure and efficient supply chain finance platform

Guided by a challenge-driven, advantage-focused philosophy, CSCEC conducted extensive research across its subsidiaries and external platforms to address critical needs in risk mitigation, operational efficiency and cost optimisation.

The resulting supply chain finance platform, built on a 1+1 architecture, integrates a treasury management module with an external operations module, forming a closed-loop system. Standardised receivables/payables data then pool from the management module to the operations module, with outcomes seamlessly reintegrated into the treasury framework.

This has led to three key benefits:

1. Strengthened risk management:
   • Three integrations: combining proprietary platforms with external services, linking treasury and operational modules, and connecting external platforms with funding partners to enable fully automated, end-to-end processes
   • Four unifications: standardising the platform, asset pool, operations and risk controls to streamline supply chain finance
   • Five-flow alignment: Ensuring consistency across contracts, logistics, cash flows, invoices and data to prevent duplicate financing and fraud. The treasury system serves as the central hub for risk oversight, safeguarding data integrity
      
2. Enhanced efficiency:
   • Features such as pre-set configurations, batch approvals, one-click transactions and automated ledger updates eliminate manual inefficiencies
   • The platform accelerates financing cycles, optimises capital deployment, enhances liquidity for small and medium enterprises (SMEs), and fosters stronger partner ecosystems to enhance the competitiveness
      
3. Cost efficiency and value enhancement:
   • Centralised operations harness economies of scale, consolidating subsidiary financing needs to improve negotiation leverage
   • Partnerships with 14 top-tier funding providers amplify CSCEC’s financial agility and competitive edge, supporting long-term growth.

Through these transformative efforts, CSCEC has cultivated a resilient and mutually beneficial industry/finance ecosystem, solidifying its stature as a global leader in construction and investment. This strategic integration of financial and operational excellence underscores CSCEC’s commitment to sustainable value creation and industry innovation.