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Cash-pooling Service for Multinationals Optimized

Source: Science and Technology Daily | 2025-01-03 09:26:15 | Author: ZHONG Jianli

The People's Bank of China (PBC) and the State Administration of Foreign Exchange (SAFE) announced enhancements to a pilot cash-pooling service on December 18, integrating domestic and foreign currency management for multinational corporations (MNCs) in China.

The pilot cash-pooling service was initially launched in March 2021 in Beijing and Shenzhen, targeting large MNCs. A second batch of pilots was introduced in 2022, accompanied by policy optimizations.

According to data from SAFE, 54 MNCs to date have participated in the pilot program. They have utilized the policies to conduct cross-border fund transfers totaling approximately 466.94 billion USD, benefiting 3,188 domestic and overseas member companies.

Drawing upon the previous experience, PBC and SAFE have launched further optimizations to these policies in 10 cities and provinces, including Shanghai, Beijing, Jiangsu, Zhejiang, Guangdong, Hainan, Shaanxi, Ningbo, Qingdao, and Shenzhen.

The latest policy highlights that domestic members of MNCs are allowed to engage in currency swap borrowing among themselves, for cross-border payments related to current accounts.

The filing process and review time for materials related to foreign payments and receipts have also been streamlined. This is expected to cut the processing time for related foreign exchange business by an average of between 50 to 75 percent.

In addition, MNCs will be permitted to determine on their own the collection ratio of external debts and overseas loans based on macro-prudential principles.

The principal enterprise of MNCs is allowed to handle centralized collection and payment for overseas member companies through a domestic main fund account.

The series of policy optimization is expected to enhance the operational efficiency of cross-border fund management for MNCs, further facilitating their activities in global markets.


Editor:ZHONG Jianli

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