Chinese monetary authorities announced the launch of a pilot project to service joint funds for multinational companies, with the aim of integrating local and foreign currency management and facilitating cross-border use of capital.
The People’s Bank of China (the central bank) and the National Foreign Exchange Authority said the platform will be launched in the capital, Beijing, and Shenzhen, an economic center in southern China.
The statement noted that the move is aimed at promoting the Guangdong-Hong Kong-Macao Greater Bay Area, the Beijing Experimental Free Trade Zone, and supporting the building of an open economy at a large scale.
The statement also indicated that the aforementioned service will unify the management of local and foreign currencies, allowing multinational companies to purchase foreign currencies as desired within certain limits. Funds for the purchase of foreign currencies can also be deposited in domestic accounts of the first level for foreign payments.
The pilot program will also implement holistic bidirectional prudential management to improve the independence and capital efficiency of cross-border financing on the basis of sound and prudent operations, increase facilitation of transfer and use of funds, and enhance operations and post oversight.
China aspires to a global qualitative leap in the concept of trade and capital and to enhance the programs that serve and facilitate the process of financial exchange according to studies and solid foundations to facilitate companies, institutions, and investors, and to find programs that serve the movement of funds and unify public policies for companies.