China's Banks Promote New Progress in Financial Support for the AI Industry Chain

Image Source: pexels

Bank of China and mainland Chinese banks launched an action plan for the development of the AI industry chain in early 2025, planning to provide comprehensive financial support for projects with a scale of no less than 140 billion USD (calculated at 1 USD to 7.1 CNY) over the next five years. They adopt diversified financial tools, covering equity, loans, bonds, insurance, and leasing, to support AI infrastructure, technological innovation, and the upstream and downstream segments of the industry chain. This initiative has driven an increase in the stock prices of companies related to the AI industry chain, indicating high market recognition. Banks actively establish an integrated service system of “equity + commercial banking + investment banking” to support the development of key technology companies and emerging application fields.

Key Points

• Bank of China and mainland banks introduce diversified financial products to flexibly support the funding needs of AI industry chain enterprises at different development stages.
• Policy support and fintech innovation improve the financing environment, reduce enterprise financing costs, and promote technological innovation and industrial upgrading.
• Banks leverage AI technology to enhance risk management and intelligent services, improving credit efficiency and customer experience while ensuring fund security.
• Cross-border financial cooperation promotes the internationalization of the CNY, facilitating capital flow between Hong Kong and the mainland, and helping AI enterprises expand into international markets.
• Banks collaborate with upstream and downstream enterprises and ecosystems in the industry chain to promote resource integration and enhance industrial competitiveness.

Policy Developments

Macro Policy

In 2025, mainland Chinese banks actively respond to national policy guidance to promote the upgrading of the financial system. Bank of China, along with several mainland banks, participates in financial reforms, optimizes monetary policy, and strengthens risk prevention. The government enhances financial support for the AI industry chain, establishing special funds to ensure capital flows toward technological innovation and industrial upgrading. Mainland banks implement the CNY internationalization strategy, promoting cross-border settlement facilitation and enhancing financial market interconnectivity between Hong Kong and the mainland. These policies provide a stable financing environment for AI industry chain enterprises, reduce financing costs, and enhance corporate competitiveness.

The policy level emphasizes the deep integration of finance and technology, encouraging banks to innovate financial products, improve regulatory systems, and ensure the healthy development of the industry chain.

Fintech Innovation

Bank of China and mainland Chinese banks actively promote fintech innovation, injecting new momentum into the AI industry chain. Banks strengthen cooperation with technology companies, promoting data sharing and openness to enhance financial service efficiency. Specific measures include:

• Strengthening the functions of the Financial Supervisory Authority’s Innovation Department, transforming it into a service window for startup needs.
• Promoting open data sharing to ensure startups can fairly access financial data.
• Establishing a multi-billion CNY venture capital fund dedicated to investing in emerging fintech companies.
• Creating a startup protection system to prevent startups from being replaced by partners.
• Building a national-level digital identity platform, constructing identity authentication and cybersecurity API infrastructure based on DID.
• Formulating tiered regulatory frameworks for startups to support early-stage experimental financial services.

AI technology is widely applied in credit risk assessment, fraud detection, intelligent customer service, and financial forecasting, improving decision-making efficiency. Blockchain technology ensures data security and transparency, with the fintech blockchain market expected to reach a valuation of 36.04 billion USD by 2028. API technology facilitates financial data integration, with Cathay Financial Holdings’ CaaS platform achieving API-based financial services. Cathay United Bank’s Cube App records over 40 million monthly digital logins, indicating strong demand for digital financial services.

Core Initiatives

Dedicated Financial Products

Bank of China and mainland Chinese banks actively launch diversified, dedicated financial products tailored for AI industry chain enterprises to meet funding needs at different development stages. Banks design project loans, industrial funds, supply chain financing, and leasing services to help enterprises flexibly allocate funds. For example, for AI chip R&D enterprises, banks provide loan solutions based on intellectual property pledges, lowering financing barriers for startups. For AI application enterprises, banks establish special industrial funds to support technological upgrades and market expansion.

Dedicated financial products emphasize flexibility and customization, with banks tailoring funding solutions based on enterprise scale, technological maturity, and industry chain position. These products cover not only traditional loans but also equity investments, bond financing, and insurance protection, providing comprehensive financial support for AI industry chain enterprises.

Banks also actively promote supply chain finance innovation, leveraging blockchain technology to enhance capital flow efficiency. Some Hong Kong banks collaborate with Bank of China to launch cross-border settlement products, facilitating capital flow for AI enterprises between Hong Kong and mainland China. These initiatives effectively promote collaboration across the upstream and downstream segments of the industry chain, enhancing overall competitiveness.

Credit and Risk Control

The credit needs of AI industry chain enterprises are diverse, with complex risk characteristics. Bank of China and mainland Chinese banks adopt data-driven and intelligent risk control systems to improve credit approval efficiency and risk identification capabilities. According to Data-Driven Risk Control: Credit Scoring Modeling Tutorial and Intelligent Risk Control Practice Guide: From Models and Features to Decisions, banks adopt the following strategies in credit and risk control:

1. Establishing credit scoring cards, conducting multidimensional scoring based on AI enterprises’ operational data, technological strength, and market performance.
2. Collecting and verifying enterprise data to ensure data quality and reduce information asymmetry.
3. Conducting group analysis and detailed classification, designing differentiated credit policies based on enterprise scale, financing purposes, and industry chain position.
4. Using models such as linear regression and logistic regression to improve risk prediction accuracy.
5. Applying rejection inference techniques to optimize credit decisions and reduce the misrejection of high-quality enterprises.
6. Regularly performing risk calibration and model validation to ensure the risk control system aligns with market changes.
7. Setting decision points and applying strategies to flexibly adjust credit limits and conditions.
8. Publishing credit scoring model monitoring reports to continuously track model performance.
9. Conducting case studies and strategy optimization for scenarios such as installment consumer products and cash loans.
10. Establishing collection frameworks and strategy systems to improve non-performing asset management efficiency.

Banks also build risk control feature profiling systems, covering the entire process of marketing, pre-loan, in-loan, and post-loan stages. Through data cleansing, feature design, and anomaly handling, banks can more accurately identify potential risks. AI technology is also applied to rule mining, decision optimization, and A/B testing, continuously improving the scientific rigor and flexibility of risk control strategies.

These credit and risk control measures enable AI industry chain enterprises to innovate in a stable financial environment, reduce the risk of funding chain disruptions, and promote healthy industry growth.

Industry Chain Collaboration

Image Source: unsplash

Upstream and Downstream Support

Bank of China and Hong Kong banks actively promote collaboration among upstream and downstream enterprises in the AI industry chain. They design diversified financial solutions for different industry segments to help enterprises improve capital liquidity. Banks provide dedicated loans, supply chain financing, and cash management services for AI hardware suppliers, software developers, and application enterprises. These measures help enterprises optimize cash flow and reduce financial pressure.

The “Productivity Bureau · New Industrialization Releases Hong Kong Manufacturing Development Research Report” tracks multiple industry chain collaboration outcomes. The report indicates that mold and injection molding product manufacturers achieve green and low-carbon production through full-process digitization, adopting a “pull-based” production model to enhance data transparency and product design capabilities. Sweater manufacturers leverage government funding programs to establish intelligent production lines, promoting flexible production and new manufacturing models.

These cases demonstrate that collaboration between banks and enterprises can effectively promote upstream and downstream industry chain synergy, enhancing overall competitiveness.

Ecosystem Collaboration

Banks focus not only on individual enterprises but also on building industry ecosystems. They collaborate with technology companies, manufacturers, logistics firms, and government departments to create open industrial ecosystems. Banks support enterprises in participating in digital transformation, green manufacturing, and smart micro-factory construction, promoting value chain upgrades.

• Key ecosystem collaboration highlights include:
  • Promoting data-sharing platforms to facilitate information flow in the industry chain.
  • Supporting enterprises in participating in green finance projects to enhance sustainability.
  • Assisting enterprises in expanding upstream and downstream partnerships to broaden industry chain coverage.

Through these initiatives, banks promote resource integration among industry chain stakeholders, enhancing the resilience and innovation capacity of the industrial ecosystem. Ecosystem collaboration becomes a key driver for the sustained development of the AI industry chain.

AI-Empowered Banking

Image Source: unsplash

Intelligent Risk Control

Bank of China and Hong Kong banks actively apply AI technology to enhance risk management capabilities. AI models can analyze large volumes of transaction data to identify suspicious activities in real time. Banks use machine learning to establish automated monitoring systems, reducing human errors. These systems predict potential risks based on customer behavior patterns and automatically adjust credit policies. Hong Kong banks adopt AI risk control platforms to achieve full-process monitoring for pre-loan, in-loan, and post-loan stages. These platforms combine big data analytics to improve fraud detection accuracy. Banks also introduce natural language processing to analyze customer feedback and identify potential issues promptly. AI technology enables banks to respond faster to market changes, ensuring fund security. Through intelligent risk control, banks reduce bad debt rates, improve asset quality, and provide more stable financial support for AI industry chain enterprises.

Service Upgrades

AI technology drives comprehensive upgrades in banking services. Banks use intelligent customer service systems to improve response speed and accuracy. Multiple enterprise practices show that AI-empowered service upgrades deliver significant results:

• After upgrading, FamilyMart convenience stores reported that approximately 8% of users began using the search function monthly, with 85% of users successfully finding desired products, increasing conversion rates by about 5%, a 2-4 times improvement over the past.
• 91APP uses Google Cloud’s AI models to optimize recommendation mechanisms, enhancing the practicality of shopping experiences and user satisfaction.
• Papayacircle Technology improves user experience and business efficiency through generative AI while ensuring platform compliance.
• 17Life uses Google Cloud Vertex AI to build intelligent recommendation systems, providing personalized recommendations based on user behavior and consumption habits, improving operational efficiency and reducing costs.
• Google Cloud provides multi-layered AI solutions to help enterprises build recommendation systems and enhance consumer shopping experiences, supported by practical results from multiple enterprises.

Hong Kong banks, drawing on these successful cases, actively introduce AI recommendation systems to provide personalized financial products based on customer needs. Banks also optimize digital channels to enhance user interaction experiences. AI technology enables banks to understand customer needs more accurately, improve service efficiency, and increase user retention. These upgrade measures help banks maintain a leading position in a highly competitive market and create greater value for AI industry chain enterprises.

Mainland China and Hong Kong Cooperation

Cross-Border Finance

Mainland Chinese banks and Hong Kong banks actively promote cross-border financial cooperation, creating a more convenient capital flow environment for AI industry chain enterprises. Bank of China Hong Kong, in collaboration with the Hong Kong Monetary Authority, participates in multiple innovative initiatives, including cross-border applications of digital CNY, fund clearing, and financial infrastructure development in the Northern Metropolis. In 2023, Shenzhen and Hong Kong held two digital CNY cross-border shopping festivals, with over 200 Hong Kong merchants accepting digital CNY payments, facilitating seamless payment experiences for residents of both regions.

In December of the same year, the two regions completed the first digital CNY cross-border commodity and gold transaction settlements, marking a new phase in cross-border financial services. The People’s Bank of China signed bilateral currency swap agreements with central banks of 29 countries and regions, with a total currency swap scale exceeding 4 trillion CNY (approximately 563 billion USD, calculated at 1 USD to 7.1 CNY), further enhancing capital liquidity.

The Guangdong-Hong Kong-Macao Greater Bay Area (GBA) financial integration leverages multiple channels, including CEPA agreements, CNY clearing agreements, Shanghai-Hong Kong Stock Connect, Shenzhen-Hong Kong Stock Connect, and Bond Connect, to achieve financial market interconnectivity. Shenzhen actively promotes the interconnectivity of digital CNY wallets between Shenzhen and Hong Kong, with potential for future two-way use and innovative cross-border payment applications.

These initiatives provide stable cross-border funding support for AI industry chain enterprises, reduce transaction costs, and enhance international competitiveness.

CNY Internationalization

Hong Kong plays a critical role as an offshore CNY center. In 2003, the CEPA agreement clarified Hong Kong’s position in CNY internationalization. The People’s Bank of China signed an CNY clearing agreement with Bank of China Hong Kong and established an CNY cash vault in Hong Kong in 2007, managed by Bank of China Hong Kong, with 95% of offshore CNY cash circulated and recycled between Shenzhen and Bank of China Hong Kong vaults.

In 2015, the People’s Bank of China issued CNY central bank bills in London for the first time, marking an improvement in the CNY’s capital raising and circulation capabilities in offshore markets. Chinese banks have become the primary intermediaries for offshore CNY circulation and settlement, promoting CNY internationalization and financial market interconnectivity between the mainland and Hong Kong. Multilateral financial institutions, such as the BRICS Bank and the Asian Infrastructure Investment Bank, also actively participate, promoting global infrastructure development and multilateral economic governance reforms.

The launch of Shanghai-Hong Kong Stock Connect in 2014, Shenzhen-Hong Kong Stock Connect in 2016, and Bond Connect in 2017 further strengthened financial market interconnectivity between the mainland and Hong Kong. The GBA’s financial integration has shifted from “transfusion-style” connections to “hematopoietic” integrated innovation, providing diversified international financing channels for AI industry chain enterprises.

The collaboration between banks in the two regions promotes the CNY internationalization process, providing robust financial support for AI industry chain enterprises to expand into international markets and participate in global competition.

Achievements and Outlook

Specific Cases

Bank of China and Hong Kong banks have achieved multiple concrete results in promoting financial support for the AI industry chain. Several enterprises have optimized operational processes through AI technology, improving efficiency and service quality.

• Financial customer service centers apply AI, automatically assigning the most suitable customer service representatives based on customer attributes and transaction behaviors, significantly improving service efficiency.
• Enterprises use algorithms to automatically generate personalized promotional materials, enhancing marketing precision and customer satisfaction based on customer attributes and purchasing behaviors.
• Machine learning models assist in predicting product placement and marketing campaign effectiveness, driving revenue growth.

These cases demonstrate that collaboration between banks and enterprises can effectively drive industrial upgrades and inject sustained momentum into the AI industry chain.

Future Directions

Looking ahead, the global economic environment is filled with uncertainty, with increased market volatility. Bank of China and Hong Kong banks will focus on long-term trends, continuously optimizing financial services.

• A robust economic foundation provides a stable base for financial service innovation.
• Inflationary pressures are gradually easing, but banks must closely monitor price and policy changes.
• Fintech investments continue to grow, promoting digital transformation and industry-technology integration, improving service efficiency.
• The banking industry needs to flexibly adjust strategies, leveraging data and professional judgment to address market challenges.
• Global central banks actively adjust interest rates, requiring banks to innovate product designs and risk management models.

The Chinese banking industry maintains steady development amid external challenges, with loan growth outpacing GDP, focusing on supporting the real economy and emerging industries. In the future, banks will strengthen international cooperation, enhance the level of CNY internationalization, and drive sustainable development through innovation, helping AI industry chain enterprises expand into global markets.

Bank of China and mainland Chinese banks actively promote financial innovation for the AI industry chain, providing diversified funding support for enterprises. These initiatives enhance industrial competitiveness and drive technological upgrades. In the future, banks will continue to optimize financial services, deepen industry chain collaboration, promote CNY internationalization, and strengthen financial cooperation between Hong Kong and China, achieving mutual growth for industries and finance.

FAQ

What is AI industry chain financial support?

AI industry chain financial support refers to banks providing loans, investments, insurance, and other diversified financial services to AI-related enterprises to assist in technology development and market expansion.

How does Bank of China assist AI enterprises in obtaining funding?

Bank of China designs dedicated loans, industrial funds, and supply chain financing products, flexibly allocating funds based on enterprise needs and lowering financing barriers.

What innovations do Hong Kong banks offer in AI industry chain finance?

Hong Kong banks actively apply AI technology in risk control and customer service and collaborate with Bank of China to launch cross-border settlement products, enhancing capital flow efficiency.

How does AI technology enhance bank risk management?

Banks use AI models to analyze transaction data, predict potential risks, automatically adjust credit policies, reduce bad debt occurrences, and ensure fund security.

How can enterprises participate in CNY internationalization and cross-border financial services?

Enterprises can open cross-border accounts through Bank of China and Hong Kong banks, participate in digital CNY settlements, and enjoy convenient international capital flow services.

In 2025, AI industry financing costs, exchange risks, and high remittance fees challenge cross-border investments. BiyaPay empowers AI enterprises with a single account for US and Hong Kong stocks, streamlining multi-market operations. International transfers cost just 0.5%, with real-time market rate conversions to minimize losses. Online account opening takes minutes, avoiding high fees.

BiyaPay’s 5.48% annualized return product outperforms bank deposits, boosting idle funds. Compliant in New Zealand (FSP) and U.S. (MSB), supervised by regulators. Join BiyaPay now to optimize financing and investing! Sign up today to grow your wealth in 2025!