HSBC has introduced a centralised foreign currency management solution for corporates in the China (Shanghai) Pilot Free Trade Zone by delivering the new service to a German multinational corporation via its subsidiary in the zone.
The new solution allows the German company, which has established more than 20 subsidiaries in China, to set up a cross-border sweeping structure via its subsidiary in the Shanghai FTZ to deploy foreign currency funds more efficiently between its overseas and domestic affiliates. It also enables the company to utilize a number of other techniques including netting and centralised foreign currency exchange to enhance efficiency of working capital management. The solution provides greater convenience and transparency in cash management, thereby optimising the company’s cash-management structure.
“Centralised foreign currency management solution is an effective way for multinationals in the Shanghai FTZ to manage their working capital," says Julia Wu, Managing Director, Banking, China, HSBC Bank (China) Company Limited. "Through the new solution businesses are able to further enhance working capital efficiency and reduce foreign exchange exposure."
HSBC was the first foreign bank in China to help corporates set up cross-border foreign currency sweeping structure and implement netting solutions when China launched a pilot scheme for a small group of selected multinational corporates in 2012.
The bank was also among the first foreign banks to launch RMB cross-border sweeping and one of the first to offer RMB cross-border centralised transaction management solutions for corporates in Shanghai FTZ earlier this year.