IBSS Industry Research Links Financial Research with Business Risk Management

International Business School Suzhou (IBSS) at Xi’an Jiaotong-Liverpool University recently hosted a session on the practical use of futures, alongside a briefing on the 2026 “ZCE Cup” competition. The event explored how financial derivatives can help businesses manage risk, connecting industry research with opportunities for students to apply their knowledge. It was organised by the IBSS Business Intelligence and Industry Research (BIIR) team. Dr Wenquan Li, Deputy Head of the Department of Finance, leads the research track, while Dr Yaxiong Li, Assistant Professor in the Department of Economics, leads the trading track. They provide guidance and support for students undertaking industry research and participating in simulated trading, respectively.

Guest speakers from Soochow Futures shared examples of business risk management. In line with the requirements of the research track, the session encouraged students to start with practical business needs, examine how financial tools serve the real economy, and apply their subject knowledge to industry issues. The discussions provided an industry perspective and practical context for students developing their competition research projects.

Dr Yaxiong Li chaired the session, opening with a familiar example: a milk tea business whose selling prices remain fixed while the cost of sugar may rise. She used this scenario to introduce the price risks businesses face when purchasing costs and selling prices cannot move in step, asking how a company can control costs and maintain stable profits. The example provided an accessible starting point for understanding the business uses of futures.

Yanjing Lu from Soochow Futures’ Wealth Management Division then introduced the ninth “ZCE Cup” Financial Derivatives Competition for University Students. She explained the entry process, rules and assessment criteria for its trading and research tracks. The research track asks teams to demonstrate their understanding of how financial derivatives serve the real economy, drawing on their academic knowledge and skills in information gathering, data analysis and the application of theory. It offers students a way to turn classroom learning into research on industry issues.

Lixuan Ren, Deputy General Manager of Soochow Futures’ Industry Services Department, presented case studies of businesses using futures to manage risk. Drawing on more than a decade of experience in industry research and client services, she discussed hedging, basis trading and the “insurance plus futures” model.

Starting with companies’ risk exposures in procurement and sales, Ren explained how hedging can be aligned with actual business operations. Using basis trading examples, she explored the relationship between spot and futures prices, including the role of supply and demand across the value chain and inventories available for trading. She also illustrated how insurance coverage and derivatives work together to manage agricultural price risk under the “insurance plus futures” model.

The cases highlighted the business context needed for financial research. Assessing a risk management strategy requires an understanding of a company’s purchasing and sales arrangements, inventory position and operational needs, followed by an examination of when particular financial tools are appropriate and how effectively they work in practice. For students preparing research projects, these details provide a foundation for understanding how the tools are used and for developing research questions that reflect business realities.

The event concluded with an awards ceremony for the 2025 “ZCE Cup” competition. Dr Wenquan Li and Lixuan Ren presented awards to the winning students, recognising their achievements in applying their knowledge and encouraging more students to take part in the next competition.

By bringing real business challenges onto campus, the event connected IBSS industry research with students’ academic development. Industry experience gave students concrete examples of how price risks are identified and managed, helping them build research around real business problems and ground their analysis in a clearer understanding of industry practice.