RMB Newsletter - BNP Paribas Securities Services

RMB Newsletter
26th Issue – October 2015
HIGHLIGHTS OF THIS ISSUE
Award: BNP Paribas named Renminbi House of the Year 2015 by Asia Risk
RMB Competence Centre Analysis:
• Relaxation on cross-border RMB cash pooling business
• Relaxation on centralised management of
foreign currency funds
Regulatory News:
•
•
•
•
•
New reserve requirement ratio of 20% for
forward FX selling business
Loan to Deposit ratio is removed
PBoC adopts new method to assess deposit reserve requirement ratio (RRR)
HKMA introduces a bilateral arrangement to enhance RMB liquidity
CSRC will enlarge investment scope for ODII funds
Free Trade Zone News:
• Services will be widened to foreign investors in the SFTZ
• Jinan promotes free trade between China and Korea
Other News:
•
•
•
•
•
•
•
•
RMB's inclusion into SDR could trigger a reallocation of global reserve
Hong Kong-Shenzhen Stock Connect possibly postponed to 2016
France supports RMB internationalisation
PBoC plans to issue short-term RMB notes in London
Russian state development bank to sell RMB bond
China reaches framework agreement on currency swap with Georgia
3 billion yuan currency swap achieved between China and Tajikistan
RMB-denominated Islamic bonds will soon debut in Dubai
RMB Competence Centre - 2015
Page 1
BNP PARIBAS NAMED RENMINBI HOUSE OF THE YEAR
2015 BY ASIA RISK
Asia Risk awards 2015: Chinese authorities kick-started the forex options market, and boosted IRS trading
by opening up the interbank bond market to foreign investors allowing BNP Paribas to take advantage.
The appearance of two-way volatility in the renminbi combined with regulatory relaxations meant that
across the Street banks active in the Chinese currency had a good year. BNP Paribas, however, stands out
for its ability to link offshore and onshore liquidity pools in a way that enabled acute management of its
risk exposures, as well as its balanced approach of servicing both corporate and financial institutional
clients in the onshore market.
Regulatory change turbo-charged the RMB market last year: first Chinese corporates were allowed to sell,
as well as buy, foreign exchange options making the structures more attractive to end-users. Corporates
are now also able to open an account in the Shanghai free trade zone (FTZ) where they can tap into the
CNH market for funding and hedging. Finally the People's Bank of China permitted foreign central banks,
supranational institutions and sovereign wealth funds to access China's interbank bond market a
potential big driver for interbank derivatives trading such as interest rate swaps.
"An obvious trend in China is allowing more derivatives trading to be done domestically. On one hand,
more local firms have started trading interest rate swaps and options, while more foreign entities are
able to trade derivatives in China as well," says Chang Geng Lai, Shanghai-based head of global markets,
Greater China at BNP Paribas.
The French bank actively harnessed the flows in both directions. A number of banks are active in the
onshore options markets but BNPP bundled this with its offshore options book in order to better manage
its risk exposures.
To do this, the bank sells a dollar/CNY extendible forward at a strike rate to an export client who is
looking to hedge its dollar receivables. The bank then has a one-time option to extend the settlement
date on this trade and as a result is able to reduce the strike price. Meanwhile on the offshore side, an
import-export client buys a dollar call and CNY put in China and sells a dollar/CNH option in Hong Kong
to reduce its hedging cost.
"The onshore liquidity pool is not big enough for us to hedge presently, so we combined it with our
offshore positions to manage our risks. It's our strength as we have always viewed the two markets as a
whole and have an integrated RMB team working closely in Hong Kong and China," says Simon Lau, head
of IRFX and commodity structuring, Asia ex-Japan at BNP Paribas in Hong Kong.
RMB Competence Centre - 2015
Page 2
Financial institution progress
Apart from corporates, the bank also took a major step in developing its financial institution business. It
deals not only with big state-owned banks; in the past 12 months, it started dealing with second- and
third-tier commercial banks as well as 26 securities houses.
Its dedication in developing financial institution clients has brought the bank some unique opportunities
in the FTZ. For example, the firm is helping Chinese banks tap into the CNH market by back-to-back
trading dollar/CNH derivatives with them.
"When the accounts rolled out in the free trade zone, we were one of the first global firms to discuss
with Chinese banks about how they can benefit from this policy. The FTZ has made offshore and onshore
markets more integrated and as a result increased CNH flows will be generated. BNPP's ability to link
the onshore and offshore sectors means it has a unique advantage to capture this market," says Lai.
"BNP Paribas is able to provide unique renminbi settlement benefit for us in this type of trade that other
banks cannot do at the moment. It greatly improves our operational efficiency. It is our top foreign bank
partner," says a Chinese bank client.
On the bond side, in March this year BNP Paribas became one of just four foreign banks to gain a bond
settlement agent licence from the Chinese central bank for the interbank market. The licence enables it
to offer onshore interest rate swaps to corporate clients and also serve foreign central banks and
financial institutions' trading needs. It is currently the market-maker and one of the three biggest IRS
traders in China's interbank market.
"Unlike other foreign banks focused on promoting corporate sales, we have set up a much more balanced
client base including both corporates and financial institutions. We have the most comprehensive
derivatives licences in China. It enables us to reach almost every niche market segment and offer a full
spectrum of products on the hedging and investment sides. I see few global banks doing something
similar they typically will need to invest time and resources in setting up the derivatives business
onshore," says Lai.
His words are backed by a Chinese corporate client: "BNP Paribas has a highly integrated team based in
China which is very efficient in executing trades. Other banks' onshore and offshore branches actually
compete with each other. That sometimes made us embarrassed and confused when choosing
counterparties
Source: AsiaRisk
RMB Competence Centre - 2015
Page 3
RMB COMPETENCE CENTRE ANALYSIS
Relaxation on cross-border RMB cash pooling business
On 5th September 2015, PBoC revised the rules on cross-border RMB cash pooling business (PBoC
Circular 279, 2015).
The new rules take effect immediately, replacing the old ones described in PBoC Circular 324, 2014.
 Key changes
Previously
Member
entity
Currently
Cannot be local government financing
vehicles (LGFVs), or in the real estate
industries
Removed
Operations for more than 3 years
The aggregated operating revenues of the
onshore member entities and offshore
member entities must be
equivalent respectively
member
entities
offshore member entities
Master entity
Must be a legal entity and located onshore
only
Can be located offshore, and no need
to be a legal entity (e.g. can be a
branch)
Master
Account
A RMB special deposit account is required for
the onshore master entity
- A RMB special deposit account is
required for the onshore master
entity, or
- A Non-Resident Account (NRA) is
required for the offshore master
entity
Bank
The master entity can appoint only one bank
to manage the master account
Up to 3 different banks can be
appointed to manage their respective
master account
Source of
funds
The funds must be generated from the
operations and investments but not financial
activities
No requirement
Overnight and
Intraday
overdraft
Not allowed
Allowed
Net inbound
quota
shareholding percentage) × 0.1
×
× shareholding percentage) × 0.5
RMB Competence Centre - 2015
Page 4
 Definition of relevant entities

This regulation is applicable to both Chinese and foreign multinational companies (MNCs).

MNC group defined in the regulation includes:
A: parent company;
B: Subsidiaries controlled by A with shareholding of 51% or more;
C: Companies whose shares of 20% or more are owned by A or B (or A and B together);
D: Companies whose largest shareholder is A or B (or A and B together) even if the
shareholding proportion is less than 20%

Member entity of the MNC group
Each of the above four types of entities can be a member entity
The onshore member entity cannot be in the key supervision list of exporting enterprises (set
by PBoC and available at BNP Paribas (China) Ltd)
All the onshore and offshore member entities are operating for more than 1 year
The aggregated operating revenue of all the onshore member entities should be
The aggregated operating revenue of all the offshore member entities should be
equivalent

Master entity
One of the member entities needs to be appointed as the master entity to fulfill the operations
An onshore master entity, which can be a finance company, needs to open a RMB special
deposit account with BNP Paribas (China) Ltd
An offshore member entity can also be the master entity if the parent company is
located
offshore.
that case, a NRA is required
 Focus
on the
masterInentity

The master entity can choose 1 to 3 banks to conduct the cash pooling business. No need for the
master entity to do the registration with PBoC, but it should prepare the following documents for
BNP Paribas and PBoC reviews:
1)
The cross-border RMB cash pooling agreement between the bank and the master entity.
If the master entity signs agreements with 2 or 3 banks, the cap of net inbound flow
should be clarified in the agreement
2)
The list of all the onshore and offshore member entities to be in the pool, including
name, location of registration, ownership structure, the opening date
3)
operating revenues in the previous year
4)
previous year
5)
The agreement between the master entity and all the member entities that specifies all
RMB Competence Centre - 2015
Page 3
 Key Rules

In principle, the MNC is allowed to create only one nationwide cross-border RMB cash pool. For
the cases of more than one cash pool, the registration with the PBoC general office is required.

MNCs can establish two cross-border RMB cash pools with one inside and one outside the
Shanghai Free Trade Zone. However, one onshore member entity is only allowed to join one
cash pool.

The corporate deposit interest rates can be applied to the funds in the master account.

The funds in the master account cannot be invested in real estates, securities, derivatives,
wealth management products, or lent to non-member entities.

Overnight and Intraday overdraft is allowed in the master account.

Quota calculation
No quota for outbound and inbound flows
Quota for net inbound flows (inbound flows minus outbound flows), calculated as below:
𝐼𝑛𝑏𝑜𝑢𝑛𝑑 𝑓𝑙𝑜𝑤𝑠 − 𝑂𝑢𝑡𝑏𝑜𝑢𝑛𝑑 𝑓𝑙𝑜𝑤𝑠 ≤
𝑂𝐸
𝑂𝐸 × 𝑆ℎ𝑎𝑟𝑒ℎ𝑜𝑙𝑑𝑖𝑛𝑔 𝑝𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 × 𝐶𝑂𝐸𝐹𝐹
𝐶𝑂𝐸𝐹𝐹 is the macro prudential
coefficient. 𝐶𝑂𝐸𝐹𝐹 is currently equal to 0.5 and can be adjusted by PBoC if necessary.
The quota will be recalculated if there is an increase or decrease of more than 20% of
𝑂𝐸 × 𝑆ℎ𝑎𝑟𝑒ℎ𝑜𝑙𝑑𝑖𝑛𝑔 𝑝𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒
RMB Competence Centre - 2015
Page 4
 Diagram: nationwide cash pooling

Case 1: Master entity is
located onshore
onshore
Master Entity
= Pool Header
Entity A
RMB
special
deposit
account
General
RMB
account
Entity B
Entity C

offshore
Entity 1
With quota
Pool
header
Entity 2
Entity 3
(optional)
Case 2: Master entity is
located offshore
onshore
offshore
Entity A
Entity B
Entity C
Master Entity
Pool
header
With quota
Entity 2
NRA at
BNP
Paribas
(China)
Ltd
(optional)
Entity 1
Entity 3
 Diagram: cash pooling in the SFTZ for reference
onshore
offshore
Outside SFTZ
Entity A
Master Entity
Pool Header
no quota
Entity B
Head RMB
general
account
account
SFTZ
Entity 1
no quota
Pool
header
RMB
special
deposit
account
Entity C
Entity 2
Entity 3
(optional)
RMB Competence Centre - 2015
Page 5
 Comparison between SFTZ and nationwide cash pooling
Option A
In Shanghai Free Trade
Zone
Option B
Rest of PRC
Company requirements
Member entities of MNC
group
1
Maximum 3
Shanghai
Demand deposit Interest
rate only
Nationwide
- RMB special deposit account is
required for the onshore master entity,
or
- NRA for the offshore master entity
Corporate deposit interest rates
(Demand deposit, Time deposit, etc.)
Not allowed
Allowed
No specific requirement
Master entity location
Bank & Account
Number of banks for cash
pooling
Bank location
RMB special deposit
account
Account required
Interest rate applied to
funds in the master account
Overnight and intraday
overdraft
Source and usage of Funds
Restriction on Funds source
Restriction on Funds usage
SFTZ only
- Cannot be in the key supervision list
of exporting enterprises (set by
PBoC)
- Operating for more than 1 year
- The aggregated operating revenues
of all the onshore and offshore
member entities must be
and
respectively
Onshore and offshore
Must originate from the
No requirement
operations and investments
Cannot be Invested in securities, derivatives, real estates, wealth
management products, or lent to non-member entities
Quota
Inbound & outbound quota
No quota
Quota for net inbound flows*
* 𝐼𝑛𝑏𝑜𝑢𝑛𝑑 𝑓𝑙𝑜𝑤𝑠 − 𝑂𝑢𝑡𝑏𝑜𝑢𝑛𝑑 𝑓𝑙𝑜𝑤𝑠 ≤
𝑂𝐸 × 𝑆ℎ𝑎𝑟𝑒ℎ𝑜𝑙𝑑𝑖𝑛𝑔 𝑝𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 × 𝐶𝑂𝐸𝐹𝐹 . 𝑂𝐸 is the
𝐶𝑂𝐸𝐹𝐹 is the macro prudential coefficient. 𝐶𝑂𝐸𝐹𝐹 is
currently equal to 0.5 and can be adjusted by PBoC if necessary.
Source: PBoC, BNP Paribas
RMB Competence Centre - 2015
Page 6
Relaxation on centralised management of
foreign currency funds
On September 2nd 2015, State Administration of Foreign Exchange (SAFE) revised the rules on the
1 (SAFE Circular 36
centralised management of
[2015]). The new rules took effect immediately from the release date.
 Major changes compared to the previous rules (SAFE Circular 23 [2014])

The onshore bank can use the FCY deposits in the International FCY Master Accounts within
PRC without occupying its foreign debt quota if the amount is
the average daily
deposit balance during the previous 6 months (the percentage was 10% previously).

The bank is also allowed to offer conversion service to the International FCY Master Accounts
with a limit of no more than 10% of the average daily deposit balance during the previous 6
months (Newly added).

The FCY foreign debt can be converted to RMB to repay RMB loans and do equity
investments, and the enterprises can choose any currency to repay the foreign debt (Newly
added).

The new version stipulates that the funds cannot be used beyond the business scope or in the
areas forbidden by the laws and regulations, replacing the previous 4 specific restrictions2.

The requirements on the MNC are relaxed: the total value of cross-border payments and
receipts of all the onshore member entities in the previous year must be
million
(transactions in RMB are not calculated previously).

The cross-border FCY receipts for goods trade will no longer need to be put into the
pending-verification account(Newly added).
1. Multinational
company and foreign currency are referred as MNC and FCY respectively hereinafter.
2. Restrictions
on the funds: 1) cannot be used beyond the business scope or in the areas forbidden by the laws and regulations; 2)
cannot be invested in securities; 3) cannot be used to make entrustment loans or repay the intercompany loans; 4) cannot be
invested in real estates if the MNC is not a property company.
 Definitions

Member entity
The entity within the MNC group that participates in the scheme of centralised management of
FCY funds is considered as a member entity.

Master entity
One of the onshore member entities should be appointed as the master entity to fulfill the
operations of centralised management of FCY funds.

Domestic FCY Master Account
It is opened by the master entity to execute centralised payments and receipts and netting on
current account items for the onshore member entities.

International FCY Master Account
It is opened by the master entity to centralise management of
- the FCY funds of the offshore member entities, and
- the FCY funds of the onshore member entities borrowed from offshore
RMB Competence Centre - 2015
Page 7
 General rules
 A MNC can choose to open both the Domestic FCY Master Account and the International FCY Master
Account, or just one of them depending on its business need. However, If both are opened, then
offshore borrowing and lending must be conducted via the International FCY Master Account.
 The master entity is allowed to open the two types of master accounts with maximum 3 banks and
there is limit on the number of these accounts.
 The FCY funds can be freely transferred among the International FCY Master Accounts, the
accounts that are opened with onshore banks by offshore entities (e.g. the Non-resident
Accounts(NRA) and Offshore Accounts(OSA)), and the accounts located overseas.
 The amount of net flows from the International FCY Master Accounts to the Domestic FCY Master
Accounts cannot exceed the aggregate foreign debt quota of all the onshore entities involved; the
amount of net flows from the Domestic FCY Master Accounts to the International FCY Master
Accounts cannot exceed the aggregate lending quota.
 Requirements on the MNCs that can join the scheme of centralised management of FCY funds:
The centralised management of FCY funds should be based on real business need
The MNC has established good framework and internal control system to manage FCY funds
The MNC has established internal electronic management system
The total value of cross-border payments and receipts of all the onshore member entities in
the previous year must be
million
The member entity must have no major irregularity in foreign exchange business during the
past 3 years. The member entity must be in Class A of goods trade which is classified by
SAFE
Other requirements depending on prudential supervision need set by SAFE
 Centralised foreign debt quota and offshore lending quota

Centralised foreign debt quota
The MNC members should manage the foreign debt quotas according to the below two formulas:
(1) 𝑇𝑜𝑡𝑎𝑙 𝑎𝑚𝑜𝑢𝑛𝑡 𝑜𝑓 𝑓𝑜𝑟𝑒𝑖𝑔𝑛 𝑑𝑒𝑏𝑡
≤
𝑁𝑒𝑡 𝑎𝑠𝑠𝑒𝑡 × 𝐹𝑖𝑛𝑎𝑛𝑐𝑖𝑛𝑔 𝑙𝑒𝑣𝑒𝑟𝑎𝑔𝑒 𝑟𝑎𝑡𝑖𝑜 × 𝑀𝑎𝑐𝑟𝑜 𝑝𝑟𝑢𝑑𝑒𝑛𝑡𝑖𝑎𝑙 𝑐𝑜𝑒𝑓𝑓𝑖𝑐𝑖𝑒𝑛𝑡
(2) 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑦 𝑡𝑜 𝑎𝑠𝑠𝑒𝑡 𝑟𝑎𝑡𝑖𝑜 ≤ 75%
In principle, the foreign debt quota in formula (1) is calculated based on the last year-ending
audited net asset in the consolidated balance sheet. For MNCs without consolidated balance
sheet, the aggregate net asset should be used.
Financing leverage ratio and macro prudential coefficient are set at 1 and can be adjusted by
SAFE
For special cases, the liability to asset ratio in formula (2) can exceed 75
approval is required.
The principal enterprise can centralise all or part of the foreign debt quotas of the onshore
member entities

Centralised offshore lending quota
RMB Competence Centre - 2015
Page 8
 Focus on the funds in the Domestic FCY Master Account

•

Source of funds
FCY collections for current account items from
offshore
•
accounts, capital accounts, reinvestment special
accounts, foreign debt accounts etc.
current accounts, capital accounts, reinvestment
special accounts, foreign debt accounts etc.
•
•
•
•
Payments for current account items to
offshore on behalf of onshore member entities
•
•
•
Use of the funds
Transfer from the International FCY Master
Account within the centralised foreign debt quota
FX Conversion from RMB
The principal and interest obtained at maturity
of purchased financial products
Borrowing from offshore directly if no
International FCY Master Account opened (as per
the current FDI and related foreign debt policies)
Other source of the funds as approved by SAFE
•
Transfer to the International FCY Master
Account within the centralised offshore lending
quota
•
FX Conversion to RMB
•
Purchase of financial products
•
•
Lending to offshore directly if no
International FCY Master Account opened (as
per the current ODI and related offshore lending
policies)
Other use of the funds as approved by SAFE
Source: SAFE, BNP Paribas
RMB Competence Centre - 2015
Page 9
REGULATORY NEWS
• New reserve requirement ratio of 20% for
forward FX selling business
On September 1st and 2nd, PBoC released the rules and explanations regarding reserve
requirement on the FX forward trading where banks are in the position to sell foreign currencies
to their clients.
Background:
RMB experienced a depreciation since Aug 11th 2015 when PBOC announced to streamline the
quotation mechanism for USD/RMB mid-price. This extra reserve requirement is one of the
measures to restrict speculation on further depreciation of RMB.
Key rules:
requirement ratio of 20% from October 15th. The forward FX selling business conducted by the
bank includes but not limited to:
•
•
•
•
FX forward
CCS without exchanging the initial principal
FX option and option combination
FX Swap
The required reserve on the forward FX dealing is calculated based on the full notional amount,
except for the FX option/option combination, for which ½ of the notional amount is calculated.
Onshore interbank FX trading are excluded from calculation.
The reserve deposit will be locked by PBOC Shanghai for 1 year period and no interest will be
applied.
Source: PBoC, BNP Paribas
• Loan to Deposit ratio is removed
On September 2nd 2015, China Banking Regulatory Commission (CBRC) amended the regulations
1st, 2015.
Key rules:
As per the revision, the requirement on Loan-to- Deposit ratio of 70% is removed. However, the
bank should monitor its Loan- to- Deposit ratio and report to CBRC in time if there is a significant
change.
Impacts:
Loan to Deposit ratio, as a mandatory ratio for commercial banks, had been implemented for 20
years. According to the new regulation, the L/D ratio is no longer a mandatory control ratio, but
only an indicator for monitoring the liquidity risk.
the short term it was not expected to introduce a significant credit increase as there are still
other constraints such as the PBoC loan quota control.
Source: CBRC, BNP Paribas
RMB Competence Centre - 2015
Page 10
• PBoC adopts new method to assess deposit reserve requirement ratio (RRR)
In order to improve the transmission mechanism of monetary policy and grant financial
institutions more flexibility in managing their liquidity, PBoC decided to implement a new
method to assess
deposit reserves from September 15th, 2015.
Key rules:
Banks only need to make sure their 10-days average deposit reserves at the central bank meet
the RRR during a reporting period. Previously, banks' deposit reserves at the PBoC had to meet
the RRR every day.
PBoC implemented a minimum daily limit: the daily deposit reserve ratio can fall only 1% lower
than the RRR.
Impacts:
The revision provides flexibility in the liquidity management to the banks. Also, the new
regulation can boost efficiency of the capital and offer some liquidity when there is a shortage.
However, it has little impact on the market overall liquidity.
Source: PBoC, BNP Paribas
•
HKMA introduces a bilateral arrangement to enhance RMB liquidity
The HKMA will further enhance the RMB Liquidity Facility through introducing a bilateral
arrangement in respect of the provision of intraday and overnight repo to replace the existing
tripartite arrangement with effect from 23 November 2015.
Background:
Under the existing arrangement, authorized institutions (AIs) participating in RMB business
(Participating AIs) are required to sign a tripartite Master Sale and Repurchase Agreement
(tripartite repo agreement) with the HKMA and the RMB Clearing Bank, in order to obtain
intraday and overnight liquidity under the RMB Liquidity Facility.
Key rules:
Starting from 23 November 2015, the tripartite arrangement will be replaced by a bilateral
arrangement, and Participating AIs are required to sign a bilateral Master Sale and Repurchase
Agreement (bilateral repo agreement) with the HKMA.
The HKMA will collect interest from Participating AIs directly instead of going through the RMB
Clearing Bank. Interest payment will be settled on a daily basis, instead of a monthly basis
currently .
Participating AIs should refer to the revised CMU operating procedures to be issued by then for
more details.
RMB Competence Centre - 2015
Page 11
• For those Participating AIs which have already signed the tripartite repo agreement, they will need
to sign the new bilateral repo agreement with the HKMA. In order to ensure seamless access to the
intraday and overnight repo under the RMB Liquidity Facility, banks should sign and return the
new bilateral agreement to the HKMA by 18 November 2015.
• For those Participating AIs which have not signed the tripartite repo agreement and wish to use
the intraday and overnight repo facilities before 23 November 2015, they can contact the RMB
Clearing Bank for signing the tripartite repo agreement.
Source: HKMA, BNP Paribas
• China releases detailed rules on reforms of state-owned enterprises
China unveiled details on Sunday September 13th 2015 of how it would restructure its state-owned
enterprises (SOEs), including partial privatization, as data pointed to a cooling in the world's secondlargest economy.
The guidelines, jointly issued by the Communist Party's Central Committee and the State Council,
China's cabinet, included plans to clean up and integrate some state firms, the official Xinhua news
agency said.
Reform of underperforming state-owned enterprises is one of China's most pressing needs. But if not
handled well, the restructuring could lead to hundreds of thousands of people being laid off and
social instability.
Xinhua said the plans included introducing "mixed ownership" by bringing in private investment, and
"decisive results" were expected by 2020. The government will not force "mixed ownership", nor will
it set a timetable, giving each firm the go-ahead only when conditions are mature, it said.
"This reform will be positive for improving the impetus of the economy and making growth more
sustainable," said a director of the economic research department at the China Centre for
International Economic Exchanges (CCIEE).Partial privatization, he added, would help establish
"check-and-balance and incentive systems" at state firms.
China's government manages 111 companies centrally under the State-owned Assets Supervision and
Administration Commission, or SASAC. Local governments own and manage around 25,000 stateowned companies and the sector employs nearly 7.5 million people.
State firms will be allowed to bring in "various investors" to help diversify share ownership, and
more state firms will be encouraged to restructure to pave the way for stock listings, Xinhua said.
Private investors will be encouraged to buy stakes in state firms, buy convertible bonds issued by
state firms, or swap shares with state firms, it said, adding steps will be taken to curb corruption
during reforms.
SOEs will be divided into commercial and public welfare-related businesses during the reform
process. Oil and gas, electricity, railways and telecommunications were identified as sectors that
could be suitable for limited non-state investment.
However, Beijing will have to persuade entrenched interests at local, provincial and national
governments to relinquish some control over state enterprises and attract investors to buy shares
after one of the worst stock market crashes in China's history.
RMB Competence Centre - 2015
Page 12
And Xinhua indicated full-scale privatization was not on the cards, saying the government was
aiming to "cultivate a large number of state-owned backbone enterprises with innovation
capability and international competitiveness".
The guidelines called for a flexible and market-based compensation system at state firms by
linking pay with company performance. The details were issued after the government said
growth in China's investment and factory output missed forecasts in August.
Source: Reuters
•
CSRC will to enlarge investment scope for ODII funds
The China Securities Regulatory Commission (CSRC) is set to permit Qualified Domestic
Institutional Investor (QDII) funds to invest in the onshore market, as well as offshore,
according to a senior executive with the regulator.
The CSRC official said the regulator is taking steps to make changes to the rules on investment
management under the QDII framework. The proposed details have not been specified,
according to Mainland media reports, but the idea is to have QDII funds that can invest both
onshore and offshore.
The QDII scheme, launched in 2007, currently enables Mainland institutions to invest in
overseas listed companies, fixed-income securities as well as financial derivatives such as
futures and options.
It is expected that QDII funds will be allowed to buy into China A-shares if the CSRC gives them
the nod for Chinese investments. The initiative would be conducive to Mainland institutions
creating more diversified portfolios for domestic investors.
Lately, the Chinese authorities have appeared reluctant to encourage Chinese managers to
invest abroad. This is evidenced by the fact that since March this year, the State Administration
of Foreign Exchange has elected not to increase QDII quotas for Chinese institutions.
It is likely that the policymakers now have a firmer grip on overseas investments following the
sharp depreciation of the renminbi recently, together with mounting expectations of a US rate
hike this year, which have prompted increased capital outflows from China, a development
Source: Asia Asset Management
RMB Competence Centre - 2015
Page 11
FREE TRADE ZONE NEWS
•
Services will be further widened
to foreign investors in Shanghai
Free Trade Zone
The Shanghai free trade zone will open the
service sector wider to foreign investors by
launching reforms catered to the needs of
enterprises, and also make policies more
transparent, said Jian Danian, deputy
•
Jinan promotes free trade between
China and Korea
Jinan Comprehensive Free Trade Zone (JCFTZ),
located in the suburb of Jinan city, rose to
fame due to the opening of Jinan International
Commodity Supermarket on April 4. Taking
advantage of the successful conclusion the
14th round of China-Korea FTA conversation
on June 1, JCFTZ actively promote the
planning and construction of a model zone of
the China-Korea Free Trade Area.
businesses have sprung up in various areas
Sept.17th at a service industry promotion
conference.
Since it was set up in 2013, the Shanghai
FTZ has unveiled 37 measures to widen
access for foreign investment in services
such as finance, shipping, commerce and
culture.
So far 1,037 service enterprises have
opened in the zone, official data showed,
brokerage, first food safety certification
company and first wholly foreign-owned
yacht design company.
On Sept.17th, 16 companies, including
those involved in cross-border ecommerce, human resources, education and
training fields, signed agreements to set up
operations in the FTZ.
But confusion still surfaces about what can
be done in the zone and complaints of
opaque policies are a problem for
regulators.
On September 14, journalists of the tour of
Chinese and Korean media arrived at JCFTZ to
conduct a field interview attempting to a
glimpse of its new planning after the signing
of the China-Korea FTA.
Jinan International Commodity Supermarket
offers 1900 kinds of Korean commodities.
Most Jinan residents got to know Jinan
Comprehensive Free Trade Zone because of
Jinan International Commodity Supermarket
which was open on April 4 and located in the
zone.
Statistics show that about 28,000 visitors
came to the supermarket in the first three
days of its trial opening and the total sales
have surpassed ten million yuan in the first
three months.
In the International Commodity Supermarket,
the skin care products, foods and cleaning
products from South Korea are more popular.
Currently, there are four Korean suppliers,
four Korean sole proprietorship enterprises
and 12 Korean brand agents to provide 1900
kinds of Korean goods for the supermarket.
communication with foreign investors and
solicit opinions in order to set out targeted
said.
Source: Shanghai Daily
RMB Competence Centre - 2015
Page 16
To be a model zone of the China-JapanKorea free trade
Jinan Comprehensive Free Trade Zone is the
sole state-level comprehensive FTZ in the
central and western area of Shandong
province. It enjoys geographical advantage,
with Jinan-Qingdao highway, Jinan-Laiwu
highway and Beijing-Shanghai Expressway
running near it and Jinan International
Airport only 18 kilometers away.
JCFTZ has strengthened cooperation with Busan
municipal government and Jeju provincial
government in international trade and the
introduction of projects. Preferential policies
have been made by Korean government to
encourage enterprises to invest in JCFTZ.
Currently, some household appliance, bioengineering and cosmetic enterprises from
South Korea mull to establish production base
in Jinan.
Source: Sdchina
Lying in the Blue Economy Circle and the
Provincial Capital City Agglomeration
Economic Circle, JCFTZ takes active part in
the construction of the One Belt One Road
planning and attempts to build a
demonstration zone of the export-oriented
economy radiating the whole province and a
new highland for opening-up.
According to Zhang Chengxin, director of the
Development Center of JCFTZ, last year JCFTZ
achieved a total income of 19.5 billion yuan,
a year-on-year increase of 21.87 percent, a
tax revenue of 0.25 billion yuan with a yearly
growth of 21.95 percent and a fixed-asset
investment of 6.15 billion yuan, a jump of 50
percent to last year. The total volume of
foreign trade last year reached up to 1.07
billion dollars, a rise of 23.99 percent.
Seizing historic opportunities of the ChinaKorea FTA and the China-Japan-Korea
Regional Economic Cooperation
Demonstration Area, JCFTZ is actively
building China-Japan-Korea bulk commodity
exhibition and trading center as well as the
China-Japan-Korea cross-border ecommerce transaction platform.
• Financial measures to be set up for
Trade Zone in Xinjiang
China will build Kashgar Finance and Trade
Zone in Xinjiang, according to the overall plan
of Kashgar Economic Development Zone
approved by China's cabinet the State Council.
According to the plan, 20 financial innovation
measures will pilot in Kashgar, which is
expected to be the second Finance and Trade
Zone in China after Shanghai Lujiazui Finance
and Trade Zone.
Kashgar, a comprehensive bonded zone
operated since April 20, have adopted a new
Free Trade Zone running mode with the highest
level of opening up and the most preferential
policy.
Source: Xinhua Finance
Cooperating with Korean government to
investment
Since the signing of the China-Korea FTA, the
cooperation between JCFTZ and South Korea
has deepened from commercial exchange to
strategic cooperation. The import and export
volume of Korean commodities as well as the
disbursement of foreign capital have realized
a rapid growth.
RMB Competence Centre - 2015
Page 17
OTHER NEWS
China
• China set up RMB 60 billion new fund set to boost small and medium firms
China plans to set up a national fund of up to 60 billion yuan ($9.4 billion) to encourage the growth
of small and micro-businesses.
The fund is in addition to measures lowering the initial capital requirement for fixed-asset
investment projects, a State Council executive meeting decided on September 1st .
The central government will invest 15 billion yuan in the fund as initial capital, according to a
circular released after the meeting. The remaining capital will be raised from private and Stateowned companies, financial institutions and local governments.
The fund will be used mainly to "support small and micro-sized businesses in the initial stage as
seed investment". The fundraising, establishment, management and revenue distribution of the fund
will be conducted according to market-oriented principles.
To attract more private capital to increase the growth of small and micro-companies, private
investors in the fund will be given priority over government-backed ones in receiving dividends, the
circular said.
The meeting also decided to lower the initial capital requirement for fixed-asset investment projects
in some sectors to reduce the threshold for such investment and encourage economic growth. The
initial capital of a fixed-asset investment project is the proportion of capital that must be paid
before, or in the early stages, of a project. The capital will usually be government revenue and can
help project operators to apply for bank loans.
The meeting decided to lower the initial capital for projects related to the construction of ports,
inland navigation and airports from 30 percent to 25 percent. For projects related to the
construction of railways, highways and urban subways it will be lowered from 25 percent to 20
percent, and for those related to corn deep-processing projects it will be lowered from 30 percent to
20 percent.
The initial capital for projects considered significant by the central government, in addition to that
for the construction of urban underground pipelines, sewage networks and parking projects, will be
open to more flexible terms, the meeting decided. However, projects related to steel, cement,
aluminum, charcoal and other industries where there is overcapacity will still have to comply with
the requirement of 30 percent to 40 percent as the government strives to restructure the economy.
The growth in fixed-asset investment slowed to a decade low of 11.2 percent year-on-year in July.
Infrastructure investment grew by just 19 percent year-on-year in the first half, compared with 23
percent in the same period last year.
The pro-growth policies announced on September 1st were rolled out as China's factory activity
continued to lose steam in August, signaling prolonged downward pressure on the economy. China's
official manufacturing purchasing managers index stood at 49.7 last month, down from 50 for July,
according to the National Bureau of Statistics and the China Federation of Logistics and Purchasing.
It is the lowest since August 2012.
Source: China Daily
RMB Competence Centre - 2015
Page 18
• 13 new financial institutions are approved to enter China Interbank Bond Market
​According to the notice released by PBoC, 13 financial institutions have been approved to enter
China Interbank Bond Market (CIBM), including four QFII, six RQFII and three foreign institutions,
among which BNP Paribas Investment Partner has been allocated USD 0.57 billion QFII quota while
Shinhan BNP Paribas Asset Management Co., Ltd has got a RQFII license of CNY 8 billion.
According to the statistics from China Foreign Exchange Trading Center, by the end of Sep. 4th, there
are altogether 9567 members who are qualified to enter CIBM. In addition to the onshore banks,
funds, security companies and insurance companies, 113 foreign banks, 111 RQFII, 16 foreign
insurance companies and 32 RQFII have been licensed to trade in CIBM.
Besides, during the first 8 months of 2015, the amount for spot trading achieved by foreign investors
aggregated CNY 587 billion, accounting for 1.2% of total market volume.
PBoC issued a notice in August 2010, allowing Foreign Central Banks, RMB Clearing Banks and HK
and Macau and Offshore RMB Trade Settlement Banks to invest in CIBM by using RMB.
PBoC announced in July this year that there is no need for the central bank, the international
financial organization, sovereign wealth management funds and other relevant foreign institutional
investors to get approval from PBoC but only the investment record is required when entering CIBM.
PBoC has released the restrictions on investment quota where foreign institutions can
independently decide the scale of investment.
Source: Reuters,BNP Paribas
•
Trade data from China on Sept.8th showed a sharp drop in the value of imports and exports,
economies. Decelerating economic growth not only means China is buying less from overseas but
reaping less money from its shipments too, as prices fall and buyers in markets such as Europe and
Japan curb purchases.
The value of imports fell 14.3 per
cent year on year in renminbi
terms in August, a steeper
fall, the 10th consecutive fall
and the worst showing since
May.
Exports dropped a more modest
6.1 per cent from a year ago,
against an 8.9 per cent drop in
July. As a result, the trade
surplus jumped nearly 40 per
cent month on month to
Rmb368bn ($57.8bn), just below
the Rmb370bn record set in
February.
RMB Competence Centre - 2015
Page 19
August data followed the trend set in
said an independent Chinese economist.
the global slowdown has very much become a reality.
.
tracks the imports that are processed in China for re-export, a sector that makes up just under a
.
While processing exports fell by more than 8 per cent in the first eight months of the year,
imports for processing fell by almost 11 per cent, indicating a weakening order book for Chinese
beginning of the month.
apparent demand for key commodities such as crude oil and iron ore fell in August compared
with July, while imports of copper
considered a leading indicator for economic growth were
flat.
Source: Financial Times
• Onshore RMB bonds issuance has opened to foreign banks
China has approved international commercial banks to issue RMB bonds for the first time.
The central bank said on Tuesday September 22nd that HSBC and Bank of China (Hong Kong)
have been approved to issue RMB bonds in the interbank bond market.
HSBC will issue bonds worth one billion yuan ($160 million) and Bank of China (Hong Kong) is
allowed to issue 10 billion yuan of bonds, the People's Bank of China (PBOC) said.
In 2005 and 2013, China allowed overseas non-financial institutions such as the International
Finance Corporation and the Asian Development Bank to issue RMB bonds.
Allowing international commercial banks to do so has diversified the RMB bond issuers and
expanded their RMB financing channels, and the move could also encourage cross-border use of
RMB, the PBOC said.
Source: Xinhua
• RMB's inclusion into SDR could trigger a reallocation of global reserve
The inclusion of the renminbi in the currency reserve basket is only a matter of time. It could
trigger a US $1 trillion reallocation of global reserve portfolios.
Before the summer, investment banks estimated that, in the medium-term, at least US$1 trillion
of global reserves could switch into Chinese assets when, and if, the International Monetary
Fund endorses the renminbi as a reserve currency. However, in August, the IMF recommended a
delay of the inclusion. When will the IMF include the yuan in its basket and what will be the
impact of that decision?
RMB Competence Centre - 2015
Page 20
-step tango
The IMF debate involves the review of its Special Drawing Rights (SDR). Created in 1969, the SDR
is an international reserve asset, which today includes four major currencies: the US dollar,
euro, British pound and Japanese yen.
review in 2010. That attempt failed, due to inadequate capital account convertibility. After half a
decade, the Chinese government has made the liberalization of the capital account and the
exchange rate a major priority. however, even if the liberalization is completed in due time, the
inclusion is not automatic.
The IMF review consists of two steps. The first step requires that the currency country is a
-largest importer.
However
tions
do remain. however, reforms are accelerating and in april
Zhou Xiaochuan
The second step requires a final vote by its board. In practice, the renminbi needs a 70 percent
majority in the final vote to become a reserve currency. In early august, the IMF was asked to
delay its yuan inclusion until September 2016. But even if China misses the cut in fall 2015,
there is a high likelihood of an interim review that will grant the yuan SDR status before 2020.
impact
In the near-
Currently, the US dollar accounts for 42 percent and the euro for 37 percent of the total,
whereas the British pound and Japanese yen are about 9-11 percent each.
However, the longthe IMF could unleash a significant, though gradual, reweighing of the entire global reserve
portfolio, which today amounts to some US$11.6 trillion. It is also likely that non-public, private
grow more efficient and liquid.
If, initially, the renminbi would be 10 percent of the IMF reserve currency basket, along with
Japanese yen and British pound, then the position of the US dollar could decrease to 38 percent
and the euro to 34 percent, respectively. Assuming the global reserve portfolio would mimic
these shifts, some 10 percent of the global reserves
more than US$1.1 trillion could flow
into yuan assets. That would herald a new era in the global capital markets.
-term, it
means increased volatility. In the mediumand thus growth prospects globally.
Source: Shanghai Daily
RMB Competence Centre - 2015
Page 21
Hong Kong
•
Hong Kong-Shenzhen Stock Connect possibly postponed to 2016
While the equity markets have been wreaking havoc with portfolios, pricing modals and traders'
lunches, it might also delay the much-anticipated link between Hong Kong and Shenzhen.
According to a report in the South China Morning Post, Hong Kong Exchanges and Clearing chief
executive Charles Li Xiaojia said on Monday September 7th, 2015 that it may not be the right time
to talk about mutual market access, bolstering the belief by brokers in the city that the proposed
plan to connect the Hong Kong and Shenzhen stock markets may be postponed to next year.
"The most difficult is the cash equity access. This involves retail investors and is the most
sensitive in China. China is traded by 80 per cent to 90 per cent by retail investors. That dictates
a certain governmental-behavior and processes that drives government decisions," he added.
Li was also reported as saying that ongoing market volatility may lead to a postponement of
some other major projects. "The good thing is the bridge is already there; the tracks are laid, the
trains have gone. Now the only thing that is going to slow down is the dispatch of the next couple
of trains," Li said in his speech in Singapore.
"Many brokers have invested a lot of money to improve their trading system for the new cross
border trading linkage. They have also hired more people to handle the extra business," a
lawmaker said. "Shenzhen Stock Exchange is also very keen on building up the ties with Hong
Kong Stock Exchange. We would like to see Mr Charles Li to work with the mainland authorities
Cheung said the market's sharp movements should not be a reason to delay the plan. "Both the
China Securities Regulatory Commission and People's Bank of China has said the market has
stabilized. This has paved the way for the new stock connect to be launched," Cheung said.
Source: Traders
France
•
France supports RMB internationalisation
France sees no significant risk in China's economy and is supporting its bid to win approval for
the yuan's inclusion in the International Monetary Fund's currency basket, French Finance
Minister Michel Sapin said on Friday September 18th 2015.
France supports Beijing's efforts to strengthen the yuan's position in global trade as well as
"China's bid to integrate the yuan amongst the IMF currencies", Sapin said at the opening of the
China-France High-Level Economic and Financial Dialogue in Beijing.
Chinese officials have pledged financial reforms to make the yuan more convertible as they push
for the yuan to be included in the IMF's Special Drawing Rights (SDRs) basket.
Sapin said he saw no significant risk from recent developments in China's economy and described
the recent fall in China's stock markets as a "necessary correction". He also said China's focus on
its domestic economy would have wider benefits. "Given the willingness of the Chinese
authorities to find a new kind of development more based on the domestic economy and less on
exports. This is a rebalancing that will be good for global stability," he added.
RMB Competence Centre - 2015
Page 22
Paris is competing with other European financial centres, such as Frankfurt and London, to
become a major offshore yuan trading centre in a bid to capitalise on China's growing financial
clout.
China's Vice Finance Minister Shi Yaobin said China's economic volatility will not hamper reforms
and that economic growth is still within a reasonable range.
China will increase France's Renminbi Qualified Foreign Institutional Investor (RQFII) quota "when
appropriate", the two countries said in a document distributed at a news conference.
Source: Reuters
UK
•
PBoC plans to issue short-term RMB notes in London
-denominated debt in London, marking its first
-currency basket.
The sale of shortas a leading offshore yuan trading hub and promote the global use of the currency, according to a
Chinese statement following discussions in Beijing between U.K. Chancellor George Osborne and
China Vice Premier Ma Kai. The PBOC and the Bank of England will also increase the size of
bilateral currency swaps.
.
Aiming to make the yuan the fifth global reserve currency, China is continuing to liberalize its
capital markets even as a stock rout in recent months prompted unprecedented government
intervention and a surprise yuan devaluation last month triggered capital outflows.
Another Milestone
The U.K. initiative adds to moves by China to open its interbank bond and currency markets to
foreign central banks earlier this year. The Chinese government wants central banks to invest
more of their currency reserves in yuan-denominated assets, a key indicator for qualification to
the SDR basket. The IMF will review the basket, which currently includes the U.S. dollar, the euro,
yen and the British pound, in November.
The yuan ranked seventh last year in terms of share in global reserves, according to an IMF
report released in August. The currency accounted for 1.1 percent of the total compared with
63.7 percent for the dollar.
-month debt from next quarter,
two people familiar with the matter said last week. The three-month sovereign yields are used as
a basis for determining interest rates on the SDR.
RMB Competence Centre - 2015
Page 23
London Link
During their bilateral discussions, U.K. and Chinese officials said they will study the feasibility of
setting up a London-Shanghai stock trading link. China will also increase a yuan-denominated
investment limit for the U.K. based on market demand, according to the statement.
The U.K. has been a pioneer in yuan usage outside of Greater China. The country won an 80 billion
yuan ($13 billion) quota in 2013 under the Renminbi Qualified Institutional Investor program, which
allows foreign investors to buy local securities using yuan raised offshore. Last year, the U.K.
government sold bonds denominated in the Chinese currency to become one of the first sovereign
Dim Sum issuers other than China.
Source: Bloomberg
Russia
•
Russian state development bank to sell RMB bond
Vnesheconom Bank, the Russian state development bank locked out of Western capital markets by
US and European Union sanctions, is in talks to sell yuan bonds on the Chinese mainland amid
preparations for President Vladimir Putin's state visit on Sept.4th.
Negotiations on the local placement are in an "advanced stage", Peter Fradkov, first deputy
chairman at VEB, as the bank is also known, said in an interview last week. "It's hard to enter the
China set new rules in July making it easier for big international investors to access its $5.7 trillion
interbank bond market. Before sanctions closed some international markets, Russian banks issued
so-called dim sum notes, which are sold outside China, in a bid to tap fresh sources of cash.
Regulatory issues over the bond sale remain, Fradkov said. He did not indicate its size or a possible
time frame for the offering.
VEB has cooperated with Russia's biggest trading partner since 2005 and has borrowed $10.7
billion in loans from China in the past decade, Fradkov said. Since the sanctions were imposed, VEB
additionally agreed on an $8 billion loan from the China Development Bank to fund projects in the
Far East as well as a 4 billion yuan ($625 million) credit line from the Export-Import Bank of China.
The potential deal comes amid declining prices for crude, Russia's main export earner, and market
turbulence as investors speculate China's economy is stumbling.
Source: China Daily
Georgia
•
China reaches framework agreement on currency swap with Georgia
China's central bank announced on Sept.27th that it had signed a framework agreement on a
currency swap program with Georgian central bank.
Both sides expressed willingness to establish the currency swap program, which will strengthen
bilateral currency cooperation, promote settlement directly in the two currencies, and facilitate
trade and investment, according to a PBOC statement.
Source: China Daily
RMB Competence Centre - 2015
Page 24
Tajikistan
•
3 billion yuan currency swap achieved between China and Tajikistan
China's central bank has signed a 3 billion yuan ($471 million) currency swap with Tajikistan, the
bank said on its website.
The People's Bank of China said on Monday the swap lasts three years and aims to boost bilateral
trade and investment and to stabilize regional financial markets.
Source: Reuters
Latin America
•
China set up USD10bn fund for Sino-Latin America cooperation
China has established a fund of 10 billion U.S. dollars to support the country's industrial
cooperation with Latin America, the central bank announced on Tuesday September 1.
Initiated by the People's Bank of China (PBOC), the central bank, the State Administration of
Foreign Exchange, and the China Development Bank (CDB), the fund will provide medium- and
long-term financing to major projects, the PBOC said in a statement.
The CDB and China's foreign reserves raised 10 billion U.S. dollars to set up the Sino-Latin
American Production Capacity Cooperation Investment Fund Co. Ltd.
To pursue mutual benefits, the company will invest in medium- and long-term projects in the
fields of manufacturing, new and high technology, agriculture, energy, infrastructure and finance
in Latin America. "The fund is willing to work with both domestic and overseas institutions to
push forward the upgrading of Sino-Latin American cooperation," the statement said.
Source: Xinhua
•
ICBC has been appointed as Argentina RMB clearing bank
China's central bank has appointed the Industrial and Commercial Bank of China as the renminbi
clearing bank for Argentina, it said on September 18th.
The two countries signed an agreement on September 17th to pave the way for the establishment
of a local renminbi clearing house.
The South American country, which faces a dollar shortage, signed the deal with the aim of
providing the financial structures to settle trade and investment transactions with China,
Argentina's central bank said.
Source: Reuters
RMB Competence Centre - 2015
Page 25
Dubai
•
RMB-denominated Islamic bonds will soon debut in Dubai
Essa Kazim, the governor of the Dubai International Financial Center (DIFC), said during a recent
visit to Beijing that the center is discussing the prospects for issuing a renminbi-denominated
Islamic bond with a bank in China.
He declined to disclose which Chinese bank will be the issuer of the first renminbi-denominated
Islamic bond, a Shanghai-based media reports. Promoted by Beijing's "Belt and Road" initiative,
all Chinese banks with branches and representative offices in the DIFC are interested in issuing
Islamic bonds in the renminbi, Kazim said.
Asked when the first renminbi-denominated Islamic bond will be issued, Kazim said it is difficult
to say but he expects it will be soon because the Chinese banks showing interest in the matter all
want to be the one to make history.
Islamic bonds are an important part of sharia compliant finance, Kazim said, and are issued by
several major economies and Muslim countries, including Hong Kong and Malaysia.
Chinese banks have been increasingly active in the global financial exchange of the DIFC. In July,
the Bank of China issued a renminbi-denominated "Belt and Road" bond worth 2 billion renminbi
(US$322 million) on the Nasdaq Dubai.
During his stay in Beijing, Kazim proposed a DIFC project that supports the implementation of the
Belt and Road initiative. As the world's second-largest economy, China should have a presence in
the Middle East, one of the world's important trade and financial hot spots, to help Chinese
enterprises connect western and eastern markets, he said.
Source: Want China Times
Zambia
• China signs Memorandum of understanding on RMB clearing with Zambia
China's central bank on Tuesday Sept.29th said it had signed a memorandum of understanding
(MoU) on renminbi clearing with Bank of Zambia, its Zambian counterpart.
Following the MoU, China will soon designate a renminbi clearing bank in Zambia, the People's
Bank of China (PBOC), the country's central bank, said in a statement.
The move will facilitate renminbi-denominated cross-border transactions for companies and
financial institutions in the two countries and boost bilateral trade and investment, the PBoC
said.
Zambia has been active in promoting the use of renminbi in cross-border trade and investment.
Source: Xinhua
RMB Competence Centre - 2015
Page 26
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Page 27