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As China continues to be a key strategic growth market
for global companies, and with the introduction of the
Shanghai Free Trade Zone, treasurers continue to look
out for opportunities to implement efficient treasury
management solutions — with the aim of releasing
trapped cash, creating mechanisms for funding growth
within China, or integrating China into regional or global
liquidity pools.
Asia Pacific Sector Insights
| Connecting China to Global Treasury Structures
RMB has propelled its way in the global arena,
and now reigns as the world’s seventh most
used payment currency and the second largest
currency used for documentary collection,
according to SWIFT. The renminbi is expected to
continue its upward trajectory as China
continues to relax its cross-border controls and
globalize the RMB to ease the development of
cross-border capital and account flows via the
establishment of free trade zones.
As China continues to be a key strategic growth
market for global companies, and with the
introduction of the Shanghai Free Trade Zone,
treasurers continue to look out for opportunities
to implement efficient treasury management
solutions – with the aim of releasing trapped
cash, creating mechanisms for funding growth
within China, or integrating China into regional
or global liquidity pools.
At Citi, we have executed a number of pioneer
solutions, including:
• Cross-border two-way pooling (intercompany
lending and borrowing)
• On-behalf structures and cross-border
payment netting solutions
• Relaxed guidelines for overseas financing into
the Free Trade Unit within the Shanghai Free
Trade Zone
Looking Ahead
The latest regulatory reforms in China have
opened a window of opportunities for
multinationals to integrate their China-based
treasury into their global setup. This allows
them to utilize their trapped cash in China to
reduce the group’s overall debt level and other
means to optimize their liquidity is now possible.
