Asian Alliance Picks Blockchain for China-Australia Trade
Members of the new Asia Pacific Provenance Council are putting their hopes on blockchain technology – as well as the support of Mastercard and Alibaba Australia – to improve the efficiency of supply chains which export $76 bln worth of Australian agricultural surplus to China every year.
The use of VeChain’s public blockchain is to allow individual shipments of agricultural products like avocadoes to be tracked from pick up in Australia until they arrive in China for purchase by consumers. It allows every member of a supply chain to confirm what product has been shipped, where it is, and – by integrating data from connected environmental sensors – whether it has been stored under appropriate temperature, humidity, movement, and other constraints.
It also provides Australian firms like supply chain integrator Fresh Supply Co (FSC) new product tracking options as exporters and logistics operators to document the movement of specific agricultural lots through supply chains, customs and international shipment providers.
“…being able to say that our products are safe, and that we have tracked them, is going to be table stakes for dealing with China,” Fresh Supply Co CEO, David Inderias, told Information Age.
The COVID-19 outbreak and its impact added to the urgency of pushing the initiative, according to VeChain, as it poses “a direct threat to food & beverage manufacturers and vendors around the globe, escalating the challenges of maximizing profits, conserving healthy cash flow and creating value” particularly in cross-continental trading.
The platform, which VeChain seeks to position itself as an enabler to empower our partners with blockchain technology to build up business applications for a variety of sectors, adds that financial pressures facing suppliers are heavily impacting their cash flows which calls for immediate invoice finance to quickly unlock unpaid invoices and stimulate business growth. Its CEO and co-founder, Sunny Lu, said:
“The implementation of blockchain technology certainly contributes to buffering the immediate economic impacts of the pandemic for the enterprises, and will help improve productivity by unleashing more resources and growth opportunities.”
The public awareness of food safety has also become high. Australia’s share in the value of exports to China reached a record 38% or $117 bln in 2019. With Chinese consumers becoming more health and safety-conscious during the epidemic thus putting food safety as top consideration when dining out or order food delivery, according to a study of InTarget Shanghai, the outlook looks positive for the trading partnership between the two countries especially as the Australian Department of Agriculture had predicted that China will account for 43% of global growth in demand for agricultural products by 2050.
With AliPay’s involvement, all the B2B payments for China-destined trades from Australian food suppliers will receive milestone-based payments of the total fiat payment upfront upon meeting the first milestone of their delivery terms.