Research on Risk Transmission Mechanism and Dynamic Management of Supply Chain Financial Market of Listed Small and Medium-sized Enterprises in China

This study investigates the risk transmission mechanisms and dynamic management strategies in the supply chain finance (SCF) market for China’s listed small and medium-sized enterprises (SMEs). With the rapid expansion of SCF under China’s "dual circulation" strategy, emerging digital technologies such as blockchain and IoT have reshaped risk propagation patterns, amplifying systemic vulnerabilities. The research highlights three critical risk dynamics: exponential diffusion of credit risks via supply chain networks, resonance effects between core enterprise credit dependencies and SME fragility, and algorithm-driven risks in platform-based SCF. By using advanced network analysis and machine learning models (like GCN and LSTM) along with transaction data from 235 listed SMEs in the Yangtze River Delta from 2018 to 2022, the study outlines how risks spread and measures the effects of policies, such as the Regulations on Guaranteeing Payments to SMEs. Key findings reveal that digital tools reduce risk exposure by 41% and enable real-time monitoring, while localized risk heterogeneity persists across industries. The proposed dynamic management framework emphasizes AI-driven early warning systems, blockchain-enabled compliance mechanisms, and multi-stakeholder governance. Policy recommendations advocate for RegTech integration, ESG-aligned financing, and cross-regional regulatory sandboxes to balance innovation with systemic stability.