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HSBC first foreign bank to pilot foreign currency cross-border netting solution in China

HSBC China is the first foreign bank to obtain approval from the State Administration of Foreign Exchange (SAFE) to implement a foreign currency netting solution for the trade of goods in China; this has been obtained for a multinational Korean customer.

This new netting solution is an integral part of SAFE's recently launched foreign currency centralized management pilot scheme for multi-national companies. The pilot scheme, launched to a small group of select Chinese and foreign invested multi-national companies and banks in Shanghai and Beijing, aims to optimise the management of foreign currency in China. Under this pilot scheme, a number of new solutions such as centralized collection and payment, netting and automated cross-border cash concentration and inter-company lending transactions will be permitted.

Kee Joo Wong, HSBC's head of payments and cash management in China, said: "These developments represent a critical opportunity for companies to unlock additional liquidity and continue to globalise their liquidity position. We have worked very closely with our client in China to design a netting solution which will enable them to consolidate their foreign currency transactions, reduce foreign currency exposure, lower processing costs and improve operational efficiency. We continue to connect our customers to new opportunities by creating leading cash management solutions for multinational companies in China."

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