China would expand the scope of a pilot program for cross-border multi-currency cash pooling (inclusive of RMB) in Shenzhen in south China’s Guangdong Province,
So that more multinationals can manage their cross-border cash flow in a more efficient manner, according to a recent notice by the local counterparts of State Administration of Foreign Exchange (SAFE) and the People’s Bank of China (PBOC).
According to the local SAFE, Shenzhen is poised to expand the scope of the pilot as the city boasts many multinational’s headquarters and more than 200 cross-border cash pooling arrangements have been set up, covering various industries including advanced manufacturing, software, telecommunications, logistics and medicine.
An employee with the Shenzhen branch of the Bank of China (BOC), said that “Enterprises are willing to adopt cross-border multi-currency cash pooling”, also the bank has been fully prepared for the expansion of the pilot.
The first batch of the pilot program was launched in Beijing and Shenzhen in March 2021 and five enterprises in Shenzhen were enrolled in the program, as of April 30, transaction volume of the five participants has topped 28 billion U.S. Dollars.
Cash pooling program is a treasury tool which enables a corporate group to concentrate and utilize cash among its group members for better cash flow management and intra-group financing.
Multinational groups may enjoy more substantial financial benefits with the multi-currency cash pooling program (inclusive of RMB) as it adds up preferential policy arrangements and integrates respective rules.
