China Aerospace Looks at Blockchain to Solve Billion-Invoice-Sized Issue

China’s state-owned Aerospace Science and Industry Corporation Ltd. (CASIC)  is looking to blockchain technology to improve its electronic invoice system by making it more efficient and easy to use, the official People’s Daily, reported.

The State Administration of Science, Technology and Industry for National Defence also outlined ways how blockchain could be utilized to innovate the use of invoices for tax purposes across the country.

The mouthpiece of the Communist Party of China (CPC) writes:

“The use of electronic invoicing can significantly reduce corporate invoice purchases and indirect management costs. The system developed by China Aerospace Science and Industry Corporation Limited Aerospace Information Co., Ltd. can seamlessly interface with the internal information system of the company and realize the comprehensive digitization of invoice information, which helps enterprises to improve the efficiency of accounting processing and provide timely decision support to business operators.”

Nearly 1.31 billion Chinese electronic invoices were circulated last year. This number is expected to increase to 54.55 billion by 2022 based on the projected annual growth rate of more than 100%.

The article noted that Aerospace’s existing digital invoice services are end-to-end, and cover filing, issuance, delivery, inspection, and reimbursement for China's tax authorities and taxpayers. The agency has so far issued 2.5 billion invoices.

Shi Yan, an official at CASIC, said that Aerospace decided to use blockchain technology to create an electronic bill chain for third-party service platform, tax bureau supervision and social organization as well as to link electronic bill data, status, circulation and other information.

The security provided by the blockchain makes the digital bills credible, verifiable and traceable, while solving the challenges of monitoring and using electronic invoices.

Shi said at present, the aerospace’s blockchain-based digital invoicing system is undergoing a trial operation in Beijing, Shandong, Hubei, Anhui, Ningxia and other places. More than 300,000 invoices and non-tax bills will be added to the system, which will help to improve billings.

Only days before, the CPC published a blockchain educational book titled, Blockchain – a Guide for Leaders, which is as a collection of articles with both theoretical and practical aspects.

Ye Hao, president of People's Daily, said the most significant contribution of blockchain is its operating mechanism that allows “fair distribution of resources, thus ensuring that the community has consistent goals, and members have behavioral norms.”