HSBC has assisted two multinational corporations by extending the RMB cross-border sweeping solution on a national basis outside the China (Shanghai) Pilot Free Trade Zone (“Shanghai FTZ”). These are the first such transactions facilitated by HSBC since China’s central bank expanded the RMB cross-border cash management pilot scheme from the Shanghai FTZ to the rest of the country in November.
Kee Joo Wong, Regional Head of Global Payments and Cash Management, HSBC Asia Pacific, said: “We are delighted to see strong interest growing among our multinational clients in mainland China in using RMB for cross-border cash management, after the pilot scheme was rolled out from within the Shanghai FTZ across the entire country. As the largest foreign bank in China, HSBC has further delivered on its insight and experience in cross-border solutions through active engagement in policy consultation with regulators. We will also continue to leverage the Group’s global network and cash management expertise to provide stronger support to companies looking to optimise and connect their onshore and offshore cash pools through innovative liquidity management solutions.”
HSBC has helped Johnson Matthey Group to unlock their surplus RMB cash and optimise their working capital management with the setup of an RMB cross-border two-way sweeping structure via one of its China subsidiaries based in Shanghai. Headquartered in the UK, and as one of the 100 largest companies listed on the London Stock Exchange, Johnson Matthey is a world leader in sustainable technologies operating in over 30 countries worldwide, with China as one of its key Asia-Pacific markets.
Johnson Matthey’s Group Treasurer Julian Tasker said: “The new solution meets our desire to integrate our domestic RMB cash pool in China with our global funding and cash management model. The structure allows us to consolidate our operating cash in China with funds in other Asian locations in a multi-currency notional cash pool based in Hong Kong which can be managed as part of the global position. We are very pleased to see the latest policy development in China and look forward to exploring further opportunities in China in the future.”
Meanwhile, HSBC has implemented an RMB cross-border two-way cash pool for Texwinca Holdings Limited via its entities based in China’s southern province of Guangdong, and successfully completed the first sweeping transaction for the company. Headquartered and listed in Hong Kong, Texwinca is a world leader in coloured knit yarn and knit fabric production whose subsidiaries are engaged in casual wears retailing, with a primary focus on mainland China.
Edward Chan, Chief Financial Officer of Texwinca Group, said: “The new solution means a great deal to Texwinca as it brings greater convenience to our cross-border treasury management. It enables us to transfer surplus RMB funds between overseas and domestic affiliates more efficiently, thereby raising our capital efficiency.”
HSBC was among the first foreign banks to offer RMB cross-border sweeping and netting to corporates when these solutions were launched in the Shanghai FTZ on a pilot basis early last year. The Bank has since assisted several multinational corporations in the zone to implement the innovative solutions.
In addition to offering RMB cross-border solutions, HSBC has reinforced its market-leading position by providing foreign currency cash management solutions to its corporate clients in China since the SAFE pilot scheme was expanded nationwide. The Bank has assisted several leading global businesses in the chemical, power equipment manufacturing and electrical and automation industries in implementing foreign currency cross-border cash solutions, such as netting, sweeping and centralised foreign currency conversion.