To implement the guidelines of the third plenary session of the 20th Communist Party of China Central Committee and the Central Economic Work Conference, further comprehensively deepen reforms, expand high-standard opening-up, and facilitate the sweep of funds by multinational corporations, the People’s Bank of China (PBOC) and the State Administration of Foreign Exchange (SAFE) recently announced the decision to optimize the pilot policies for integrated RMB and foreign currency cash pooling for multinational corporations in 10 provinces and cities, namely Shanghai, Beijing, Jiangsu, Zhejiang, Guangdong, Hainan, Shaanxi, Ningbo, Qingdao and Shenzhen.
The main contents are as follows. First, cross-currency lending for current account cross-border payments will be allowed among onshore participant companies of multinational corporations, reducing the financing costs for enterprises. Second, the filing process and the review of materials related to foreign receipts and payments will be streamlined, thus facilitating cross-border receipts and payments. Third, multinational corporations will be permitted to determine the proportion of external debt and overseas lending based on macro-prudential principles by themselves, simplifying the management of cross-border capital operations. Fourth, multinational corporations’ leading company will be supported to manage, for offshore participant companies, the centralized payments and receipts between offshore participant companies and onshore participant companies or offshore entities through their domestic funding concentration accounts, to further enhance the efficiency in fund use.
Moving forward, the PBOC and the SAFE will continue to optimize cross-border capital management policies for multinational corporations, and increase support for the facilitation of cross-border investment and financing, thus better serving the high-quality development of the real economy.
