In recent years, to support new system development for a higher-standard open economy, the People’s Bank of China (PBC) and the State Administration of Foreign Exchange (SAFE) have made consistent efforts to facilitate the use of cross-border funds by multinational corporations. In March 2021, the PBC and the SAFE launched the first pilot cash pooling program integrating domestic and foreign currency management for multinational corporations in Beijing and Shenzhen. So far, the program has managed nearly $50 billion cross-border funds. It has greatly improved the efficiency for multinational corporations in their cross-border use of domestic and foreign currency funds and effectively reduced their exchange risks and financial costs.
To implement the decisions and arrangements of the CPC Central Committee and the State Council and to enhance policy support for headquarters economy, the PBC and the SAFE recently decided to start the second round of the pilot program in Shanghai, Guangdong, Shaanxi, Beijing, Zhejiang, Shenzhen, Qingdao and Ningbo, with improved management policies to facilitate the coordinated use of cross-border funds by multinational corporations. New policies introduced to the program include increasing pilot areas and companies, allowing multinational corporations to handle centralized receipts and payments of domestic and foreign currencies in China for their overseas subsidiaries, and further streamlining RMB-denominated cross-border receipts and payments for multinationals.
Going forward, the PBC and the SAFE will continue to follow the decisions and arrangements of the CPC Central Committee and the State Council, further facilitate cross-border trade, investment, and financing, and create a market-oriented, law-based and internationalized business environment, so as to support stable and sound development of foreign-related economic activities.
