Photo taken on March 13, 2018 shows the headquarters of the People's Bank of China in Beijing, capital of China. (Photo/Xinhua)
China's monetary authorities announced on Friday the launch of a pilot cash-pooling service for multinational companies that integrates domestic and foreign currency management to facilitate the use of cross-border capital.
The pilot program will be launched in the country's capital Beijing and the southern economic powerhouse Shenzhen, and will serve large multinational companies with relatively high credit ratings, according to the People's Bank of China (PBOC) and the State Administration of Foreign Exchange.
The move aims to advance the construction of the Guangdong-Hong Kong-Macao Greater Bay Area and the Beijing pilot free-trade zone, support the building of a higher-level open economy, and improve the ability of financial services to serve the real economy, the PBOC said in a statement.
The cash-pooling service will unify domestic and foreign currency management policies and allow multinationals to purchase foreign exchange at will within a certain limit, it said, noting that the purchased funds can be deposited in the domestic primary account for external payment.
The pilot program will also implement two-way macro-prudential management to improve the autonomy and capital efficiency of cross-border financing on the basis of steady and prudent operation, further facilitate the transfer and use of funds, and enhance operational and post-operational oversight.
Based on the performance of the pilot program, the authorities will improve the management framework of such services to strengthen cross-border trade and investment facilitation, create a better business environment and boost the sound development of foreign-related businesses, said the PBOC.