DST News: China has expanded its cross-border cash pooling policy for multinational companies operating in the country, with the new rules taking effect Monday, in a move aimed at facilitating cross-border trade and investment.
The State Administration of Foreign Exchange (SAFE) said the revised policy allows multinational companies to determine the proportion of funds they want to centralize and manage yuan and foreign-currency funds through a single account.
The arrangement will allow corporate groups to centrally allocate funds while giving individual subsidiaries flexibility in using their capital. It also encourages greater use of the yuan in cross-border business operations.
The policy was previously implemented on a pilot basis in selected regions and has now been extended nationwide. Companies whose parent firms are registered in pilot free trade zones may qualify for lower thresholds when establishing cross-border cash pools.
The new framework also allows multinational groups to consolidate the foreign-debt and overseas-lending quotas of their member companies, potentially improving the efficiency of group-level cross-border fund management.
SAFE has also introduced measures to simplify administrative procedures. Registration will be handled through a single-window system at the SAFE branch where the parent company is based, while certain registration changes can be processed through participating banks.
Dong Shaopeng, a senior research fellow at the Chongyang Institute for Financial Studies at Renmin University of China, said the nationwide rollout would give multinational companies greater flexibility in fund scheduling, centralized pooling and payments.
He said the policy could help companies reduce idle funds and cross-border settlement costs while supporting wider use of the yuan in international transactions.
The expansion comes as multinational companies face increasingly complex cross-border capital flows and diversified currency requirements. Analysts said the new framework could strengthen treasury coordination and risk management while creating a more unified channel for financial connectivity between China and overseas markets.
SAFE said China will continue to optimize cross-border fund management, improve the convenience of trade and investment, and support the high-quality development of the real economy.
Source: Global Times
