9
Connecting China to Global
Treasury Structures
Compared with Europe, Asia has always been considered a challenging region for multinational
companies looking to create standardized cash management and liquidity structures. The
combination of multiple currencies, currency controls, complicated tax regimes and varied legal
frameworks have severely limited the options available to treasurers; especially in the area of
liquidity management. Recent regulatory relaxation in China is a game changer enabling the
inclusion of China-based treasury into the global setup.
Navigating Asia’s Diverse Markets
Countries across the region have traditionally
been categorized into “liberal” and “restricted”/
“semi-restricted” markets – and they have
largely remained in the same category.
The “liberal” countries allow for relatively free
movement of currencies (local as well as
foreign) across borders, while certain
considerations such as thin capitalization norms,
and regulatory reporting have to be observed.
However, on the whole, treasurers are able
to manage liquidity positions and funding
requirements with a view to minimize funding
costs by leveraging internal liquidity and moving
surplus positions out of these countries to
benefit the group as a whole.
The five “liberal” markets (i.e. Australia, New
Zealand, Hong Kong, Singapore and Japan) are
all important markets in their own right.
Australia and Japan constitute huge domestic
markets for companies across the automobile,
shipping, heavy industry, mining, technology,
consumer and healthcare sectors. Hong Kong
and Singapore, which are relatively small markets
in comparison, are often hailed as important
finance, procurement or invoicing hubs.
Aman Singh Chadha
Asia Pacific Industrials
Sub Sector Head
Treasury and Trade
Solutions, Citi
Asia Pacific Sector Insights
| Connecting China to Global Treasury Structures
