Cross-Border RMB Business Free Trade Zone "Expanding"

Less than 7 months after the establishment of the Shanghai free trade pilot area, every change and growth of P has attracted the attention of the whole world.

In May 14th, the Shanghai Banking Regulatory Commission issued the new regulation of FTA banking supervision, which is considered to be a substantive progress in the financial regulatory reform of Shanghai free trade area.

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"P >" so far, the reform, innovation and financial opening of the FTA are steadily advancing.

But this is a series, but it's not over yet.

How to test the effectiveness of the 7 months since the establishment of the Shanghai free trade zone? In May 14th, Tu Guangshao, executive vice mayor of Shanghai, described the new reform that was about to sail with the "second quarter" of the free trade area.

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< p > May 12th and 13th, with the help of the China Banking Regulatory Commission, the newspaper conducted an in-depth interview with the FTA to investigate the effectiveness of the Shanghai free trade area in the past 7 months and to explain the new deal one by one.

The current series of reports is the presentation of the survey.

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< p > recently, the CBRC organized a number of branches of the Shanghai free trade area of many banks.

Along with the number of free trade zone branches of banks approved to carry out RMB foreign loans business, the demand for RMB funds used by the FTA pilot enterprises has been released in a concentrated manner, which has accelerated the reflow of RMB funds overseas.

In the future, with the expansion of the use of RMB, many RMB international markets will be formed around the world. This is also the direction of RMB internationalization. < /p >

< p > "if a country wants to become an economic power, its currency should also be accepted by more people."

According to Wu Wenjie, President of the Asia Pacific region of RMB payment product management in Deutsche Bank's Global trade finance department, the Chinese are getting closer to the "Chinese dream".

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< p > "I am glad to see that RMB cross-border trade settlement will be established from the pilot to the full liberalization and the establishment of RMB clearing centers in Europe. This progress will be of great benefit to the use of RMB in international trade and investment."

Wu Wenjie excitedly told reporters.

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Wu Wenjie is even more pleased that in February 21st this year, the central bank issued a notice on the expansion of RMB cross-border business in the Shanghai free trade area. The RMB cross-border loans and RMB two-way pool and other rules fell to the ground, allowing banks to actually set up the RMB cross-border business and "take a big step".

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< p > May 13th, the reporter followed the media visiting group organized by the China Banking Regulatory Commission and went to the Shanghai free trade area for an on-the-spot interview.

The reporter was informed that as of April this year, 26 cross-border RMB loans abroad had been generated in the FTA pilot area, amounting to 4 billion 500 million yuan, and 12 two-way RMB pool business participated in the bank, with a total revenue of 4 billion 600 million yuan and a cross-border RMB settlement of more than 46 billion yuan.

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< p > as the "experimental field" of the national financial reform, the 28 square kilometers of Shanghai free trade pilot area (hereinafter referred to as the "free trade zone") carries too heavy a burden.

"3 months is too long, seize the day" - now, nearly 3 months have passed, how are the RMB lending overseas? What are the innovative cases in the course of business development? Can foreign banks take the "east wind" in the FTA? When will the account system of the free trade area be able to land? < /p >

P > < strong > small significance < /strong > /p >

In February of this year, the Shanghai headquarters of the people's Bank of China issued two financial rules, respectively, the implementation of the views on the implementation of the cross-border RMB payment by the Shanghai Payment institutions and the notice on the expansion of the RMB cross-border use of the China (Shanghai) free trade test area.

The rules fall to the ground that the RMB overseas loan is opened in the free trade area.

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< p > before that, only foreign enterprises can borrow renminbi foreign debts within the range of betting differences approved by the business sector. Chinese enterprises borrow foreign debts and need approval and approval from relevant departments.

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< p > "we need the support of low cost funds. The interest rate of RMB loans in Hongkong is only 4%-5%, which is much cheaper than the 6% interest rate in the mainland.

This part of the loan will be used for the construction of the park and equipment manufacturing industry, and the enterprise is the biggest beneficiary. "

Weng Wei, managing director of Shanghai FTA joint development Co., Ltd., told reporters.

On the day of the rules, the company was fortunate to cooperate with the Bank of China Shanghai branch to become the first cross-border RMB loan business to support the construction of the main body of the Shanghai free trade area.

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< p > also on the same day when the rules were laid down, a distribution center of a state-owned group district was arranged, and the ICBC (601398, stock bar), which completed the first 100 million yuan loan abroad, was recently acquired by the company.

"After approving the application of this larger amount of RMB foreign loan business, we have added 170 million yuan to it. At present, we have accumulated 270 million yuan of overseas loans through ICBC Asia, Europe and many other overseas institutions."

ICBC FTA branch president Zhou Hong introduced to reporters.

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< p > and according to the relevant person in charge of the distribution center of the state-owned group, this overseas loan actually reduced the company's financing cost of nearly 3 million yuan.

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< p > from past experience, more overseas loans of domestic enterprises are operated by means of internal guarantee loan or similar internal loan.

The so-called "internal protection" means that a domestic enterprise applies for a letter of guarantee to a domestic branch, and a letter of financing guarantee from a domestic branch to an offshore center.

In the FTA's cross-border application rules, the banks are also exploring the mode of direct credit given by overseas banks to domestic enterprises.

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< p > "after all, overseas financial institutions do not have a better understanding of domestic enterprises than Chinese banks or local banks.

However, after the concept of free trade zone came out, overseas financial institutions and local banks continued to communicate, so that the lending intention of enterprises in the region was stronger than before. At the same time, enterprises in the region were willing to go out.

In particular, relatively good listed companies, financial statements are very pparent, offshore financial institutions are relatively able to get public information.

The above distribution center responsible person told reporters.

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< p > Shanghai Pudong Development Bank's relevant person in charge told reporters that for the enterprises engaged in overseas business expansion, the management of cross-border RMB two-way pool management within the group could facilitate the operation of overseas investment enterprises by making more convenient use of the funds of domestic parent companies, and avoiding the difficulties of new overseas enterprises in local financing. For multinational companies, the sub branches and branches of the whole world can be gathered in the headquarters of the free trade area when they have temporary surplus funds in operation, so as to greatly improve the regulatory effect of group funds and enhance their financial operation and capital utilization efficiency.

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< p > Shanghai Pudong Development Bank recently launched the FTA financial services program v3.0. Through cross-border RMB foreign loan business, enterprises in the FTA can borrow renminbi funds from abroad, thus effectively reducing their financing costs.

In terms of loan amount, the general enterprises in the region are paid 1 times the paid in capital, and the borrowing period is 1 years or more.

Through its linkage with Pudong Development Bank Hongkong branch, the bank can provide more comprehensive financial services to enterprises.

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Chen Liping, President of the Shanghai bank Free Trade Zone Branch, gave a practical case for reporters. Recently, Shanghai bank is contacting overseas banks to provide cross-border RMB loans to Limited by Share Ltd in Shanghai Waigaoqiao (600648, Guba) bonded zone. Shanghai commercial savings bank Limited by Share Ltd and Shanghai commercial bank and Shanghai bank (Hongkong) Co., Ltd. will form a syndicate overseas and jointly invest RMB 30 million yuan. P

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"P >" has reached a cooperation, we are more to provide help, deepen the understanding of overseas financial institutions to enterprises in the region.

This is a progress, a substantive change since the launch of the FTA, which helps enterprises not to be confined to the banks in the region in the future, and more direct financing abroad. "

Chen Liping believes that although the amount of the business is not large, it is of great significance.

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< p > < strong > foreign banks boosted < /strong > /p >

< p > although foreign banks have no advantage in scale, compared with Chinese banks, according to the annual report published by the CBRC, the total assets of foreign banks in China in 2013 accounted for only about 2% of the total assets of the banking sector.

But the industry generally believes that foreign banks can take advantage of their own business characteristics to seize the "free trade zone" financial reform opportunities.

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Up to April 22nd, a total of 20 foreign banks have submitted applications to the branches of the free trade zone to the relevant departments. 10 of them have been allowed to open business, namely, HSBC China, Standard Chartered China, Citigroup China, East Asia China, DBS China, Hang Seng China, Australia and new China, Mizuho China, MITSUBISHI Tokyo, Japan Union China, Mitsui China.

The above 10 banks are all sub branches in the free trade area, and the business area is Waigaoqiao Free Trade Zone. The other 10 are actively preparing for the construction.

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< p > in the view of Pei Yigen, vice president of Citigroup China, the market competition in terms of balance sheets, spreads and scale is not actually good at foreign banks. Now, through the FTA, this mode is beginning to turn to risk management, intermediate business and financial management.

"Based on this, it is able to give full play to the strength of foreign banks.

For example, when enterprises go overseas or when domestic financial markets are connected with overseas markets, our strength in overseas markets and the strength of product services can be differentiated and focused through long-term experience in major overseas financial centers. This is an opportunity for foreign investment banks. "

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Qiu Yunping, President of HSBC China Shanghai branch, held the same view in an interview with reporters. He believed that foreign banks should focus more on their business strategy, actively follow up the landing of a series of policies in the FTA, and provide differentiated services by using the experience of multinational companies that have been serving for a long time. P

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< p > as the "leader of foreign banks", Citigroup China and HSBC China's two large foreign-funded banks covering the world are located in cash management and settlement services, cross-border trade financing and cross-border capital market financial services.

Among them, especially in the service area, it is the most experienced group that can carry out cross-border RMB pool business in the group.

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< p > its special significance is that before that, cross border capital flows must provide proof of use, but now it can be a cause for no reason. Enterprises allocate funds according to their needs, and arrange funds according to different interest rates and exchange rates.

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"P >" we began to try cross-border RMB two-way pool business in 2004. At that time, we mainly provided services for multinational enterprises, because these enterprises hoped to get a more direct, effective and centralized fund management mode.

Now, taking advantage of the FTA policy, we have played the experience of cross-border RMB business for 10 years. "

Pei Yigen said.

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In January 17th this year, Citibank (China) Co., Ltd. (Citigroup China) announced that it would join hands with Roche China to establish the first fully automated cross border RMB two-way pool in the Shanghai free trade pilot area. P

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< p > "automatic cross conversion is based on our global capital platform support, just ten or twenty years of Citigroup Global cash management, and now it is just a logical addition to the RMB."

Zhang Xiaomeng, President of Citigroup China branch of the free trade area, told reporters that "before China, for many multinational enterprises, it is a relatively isolated management scope, because there are many policy restrictions on the cross-border movement of RMB. After the FTA regulations fall, many enterprises automatically incorporate Chinese funds into the global co-ordination scope. For example, enterprises with overseas ordering needs can make use of domestic funds to support overseas operations, so that the overall financial cost will be greatly reduced."

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< p > < strong > narrowing of interest margins between domestic and overseas < /strong > < /p >

After the launch of the cross-border use rules of RMB in February of this year, banks started to cross border RMB lending business in succession, so that the banking services enterprises' lending to the renminbi in Hong Kong increased sharply in P.

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< p > according to the sources, the renminbi funds borrowed by the FTA enterprises in Hongkong will soon take up the 1/3 of the entire Hongkong RMB loan.

With the growth of Renminbi funds borrowed by the FTA enterprises in Hongkong, the spread of RMB lending business between domestic and foreign banks is also narrowing.

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< p > reporter has learned that in the past six months, the interest rate of RMB loans has increased by about 4.5% in overseas markets including Hongkong.

However, this interest rate is still somewhat attractive compared with the current 6%-7% lending rate in China.

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< p > "the interest rate on RMB loans abroad is now 4.5%, rising."

Cheng Haiqing, chief financial officer of morning news technology group, said, but in his view, the current impact is not very big.

"4.5% of the loan interest rate for domestic financing, still very attractive."

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< p > on the reasons for the rising interest rate of RMB in offshore markets, Wang Xinhao, President of the Shanghai Free Trade Zone Branch of Pudong Development Bank, analyzed to reporters. "In the past, the RMB was one-way flow, and after the renminbi was exported to foreign countries through trade, the demand for RMB funds in the overseas market was very limited. The demand determined the market price of the fund, so the interest rate of RMB in the offshore market was very low.

Once the RMB reflux mechanism is formed, the use of RMB will increase, and the interest rate will not be very large.

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< p > by the end of January 2014, the balance of RMB deposits and certificates of deposit in Hongkong was 893 billion 400 million yuan and 192 billion 100 million yuan respectively, amounting to 10855 billion yuan.

According to the recent report of ANZ bank, the ratio of RMB loans and deposits in Hongkong is 7: 1.

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< p > for this reason, many bankers said that the stock of foreign currency is a living concept.

Previously, constrained by the lack of investable renminbi assets, the degree of acceptance of RMB Offshore was affected. Once the cross-border RMB lending business was launched, the Shanghai free trade area enterprises released the demand for overseas RMB funds, and the huge demand affected the use price of funds.

This also accelerates the repatriation of RMB funds overseas, and spreads after the reflux mechanism is formed.

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< p > "from the point of view of the free trade area, the price of liquidity will form a relatively balanced price both inside and outside the country."

Zhang Xinyuan, general manager of the International Settlement Department of Shanghai branch, Bank of China, said in an interview.

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< p > Ji Rong, vice president of Shanghai agricultural and Commercial Bank Free Trade Zone Branch, predicts that if the share of RMB loan business in the offshore market increases, the regulatory authorities may have relevant normative requirements, which will also affect the loan time and even the cost of capital generated by the business.

"From our current experience, it will take 3 to 4 months, and two months will be quicker."

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< p > however, insiders also pointed out that, influenced by cross border borrowing of enterprises in the FTA, the rising interest rate of RMB outside the country also reflects from one side that the amount of overseas RMB capital pool is very small, so the interest rate fluctuation in offshore markets is obvious.

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< p > < strong > the FTA account is asymptotically < /strong > < /p >.

< p > April 11th, when central bank governor Zhou Xiaochuan and vice premier Wang Yang investigated Shanghai FTA pilot area, setting off the industry's eagerness for the opening of the second quarter of FTA financial reform.

It is understood that the free trade account system of free trade area, which is regarded as the core financial innovation measure of the free trade area, is expected to be officially launched in the second quarter.

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< p > "we and banks are looking forward to landing as soon as possible, bringing an institutional arrangement for the investment and financing facilitation of the pilot area."

Zhang Hong, director of the finance and Finance Bureau of the Shanghai free trade pilot area, told reporters that the "free trade account system" embodies the core of separate account management, offshore freedom, two-way interoperability and limited penetration.

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< p > recently, at the 11 FTA branch seminars of journalists, a number of bank's FTA branch governors also said they were "eager" to expect the central bank's FTA account system rules to fall. Some of the banks have also accepted several rounds of tests, but have not received the detailed "timetable" issued by the central bank.

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< p > according to Wang Jianxin, vice president of the Shanghai FTA Experimental District branch of Pudong Development Bank, around the establishment of an independent accounting system of the free trade area account system, the company has participated in the 4 round of tests and tested under the control of the second line of simulation.

Chen Liping, President of Shanghai bank FTA pilot branch, also revealed that at present, Shanghai bank has completed the top-level design of the unit management of the FTA business accounting unit, and the system development based on the free-trade account system has basically been completed and is currently being tested.

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< p > it is not convenient to disclose the details in the central bank's testing, < a href= "http://www.91se91.com/news/index_cj.asp" > Zhang Xin Yuan < /a >. However, the central bank's concern is mainly about risk control, and the financial reform policy requires "mature one, falling to the ground". In fact, for our banks, they still prefer to do business in a more healthy market.

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< p > Zhang Yaoxing, vice president of the Agricultural Bank of China free trade pilot area branch, also said that in the aspect of system acceptance, < a href= "http://www.91se91.com/news/index_cj.asp" > risk management and control < /a > is the focus of the central bank's attention.

For this reason, the testing bank is required to submit business information to the regulatory authorities in time for handling the business, so as to facilitate the supervision of the regulatory authorities in advance and in matters.

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< p > "at present, the central bank's" a href= "http://www.91se91.com/news/index_cj.asp" RMB > /a > overseas loans, capital pools, and centralized receipts and payments are in fact under the current account of trade facilitation. This means that the central bank must first liberate the current account and meet the challenges brought about by the opening of capital account. "

Wang Jianxin predicted to reporters that the specific way in the future might be to liberate the whole account system abroad, and then effectively infiltrate into the territory.

"When to launch, it depends on the arrangement of the central bank."

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< p > therefore, Sun Lijian, director of the financial research center of Fudan University and vice president of the school of economics, said in an interview with reporters that we should strictly guard against arbitrage risks. "In the free trade area, corporate juridical persons can complete RMB convertibility in the free trade area. This is a very important step in the liberalization of RMB capital account, but it is also easy to lead international capital, especially those with no real trade background, to go in and out quickly.

Once the capital flows back sharply, it will impact the capital market and the real economy, which in turn will affect the whole process of RMB capital account liberalization.

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< p > "in fact, this is also the biggest difficulty of domestic financial reform."

Sun Lijian believes that for sharp funds, a regional liberalization is equal to the liberalization of the whole country.

From the following point of view, the decision-making level needs to better balance the impact of exchange rate, interest rate liberalization and external capital flow in the process of opening capital account.

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