C&D Inc. Shares Three Key Experiences to Help Chinese Enterprises Navigate Global Commodity Risks

As the era of Globalization 3.0 approaches-marked by rising calls for "de-globalization" on one hand, and the vigorous global expansion of Chinese enterprises on the other-the "Born to Be Global" 2nd Global Summit of Chinese Enterprises Going Overseas and 2025 Mid-Year Industry Summit was held at the National University of Singapore from June 19 to 20, 2025.

Jointly launched by Hangzhou Ba Jiu Ling Cultural Creative Co., Ltd., Jidang Business Studies, and the Sino-Commercial Overseas Industrial Alliance (SCOIA), and co-organized by C&D Inc., the summit brought together over 50 political and business leaders, along with representatives from international business associations and more than 1,000 corporate delegates from China and abroad, to explore the latest trends and opportunities in global expansion.

As a leading player in the supply chain sector, C&D Inc. was invited to share its insights on using futures instruments to help global enterprises mitigate the risks of commodity price volatility in international markets. Caption: Li Zhi, General Manager of the Futures Management Department of the Risk Control Center, C&D Inc., delivering a keynote speech at the summit.

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In his speech titled "Proactive Risk Management: Tackling Supply Chain Black Swans," Li Zhi highlighted the key challenges faced by Chinese enterprises going global. Drawing from historical lessons and innovative practices, he offered a systematic analysis of how futures instruments can play a critical role in stabilizing global supply chains.

In his presentation, Li Zhi highlighted three core concepts in price risk management: Breakthrough, Exploration, and Transformation.

Breakthrough: From the "Soybean Incident" to Financial Tool Innovation

Li Zhi began his speech by revisiting the 2004 "Soybean Incident," a crisis that shook China's grain and oil industry. The international soybean market underwent extreme volatility over a six-month period-prices surged and plunged by more than 50%-driven by multiple factors, including the price discovery mechanisms of the Chicago Board of Trade (CBOT). The shock was severe for China's soybean processing sector, which was highly dependent on imports. "Nearly 1,000 Chinese companies went bankrupt," he said, "with 85% of the processing capacity shifting to foreign ownership, resulting in total economic losses exceeded 15 billion yuan (approximately USD 2.1 billion)".

The crisis became a catalyst for change. According to Li Zhi, the adoption of futures instruments helped compress the price volatility of soybeans from 1,300 cents to just 210 cents per bushel-an 85% reduction. This has been a key factor in preventing similar crises since the "Soybean Incident."

Leveraging futures instruments to effectively manage price volatility has become a critical strategy for enterprises seeking to navigate international markets.

Exploration: C&D Inc.'s Three Core Practices

Even today, many Chinese enterprises remain unfamiliar with the use of futures instruments in global markets. Citing data, Li Zhi noted that 98% of Fortune 500 companies utilize financial derivatives for hedging purposes, whereas only about 30% of non-financial listed firms on China's A-share market do the same.

With four decades of experience in international operations, C&D Inc. stands out as a leading Chinese enterprise in the strategic use of financial derivatives within the supply chain sector.

During his speech, Li Zhi shared how C&D Inc. has built an effective framework for using futures instruments, structured around three core pillars: risk control, business operations, and research. He distilled this approach into a guiding principle: "Risk control comes first, business forms the foundation, and research supports the base."

Transformation: From Managing Its Own Risks to Empowering Others

As C&D Inc. has matured in its application of futures instruments, it has progressively integrated its proprietary futures framework into its broader supply chain services. By leveraging these tools, the company has helped over 900 industrial clients build robust risk management shields-enabling stable upstream pricing, consistent midstream margins, and predictable downstream costs.

As acclaimed Chinese financial commentator Wu Xiaobo observed, "C&D Inc. has transformed its externally driven resource integration capabilities into internally driven service delivery-offering end-to-end support across information, logistics, and finance."As Chinese enterprises embark on this new wave of globalization, it is companies like C&D Inc.-with deep operational experience and robust overseas supply chain capabilities-that must step forward to share their know-how and open up their resources. Only then can Chinese firms expand globally in a more professional, secure, and efficient manner.In closing, Li Zhi emphasized, "In this new era of global navigation, only by jointly building a shared risk-bearing mechanism can Chinese enterprises chart a steady course through turbulent global waters and achieve sustainable success.""One struggles alone, but thrives together." This is not only a recognition of C&D Inc.'s forward-thinking practices, but also a broader call for Chinese enterprises to embrace collective resilience in navigating global risks.
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