The Development of Corporate RMB Business in Hong Kong
| JUL 2009 | The PBoC and other five supervisory units in the Mainland of China jointly issued the "Implementing Rules of the Administrative Measures for Piloting Cross-Border Trade Settlement in RMB" to formally launch cross-border RMB trade settlement pilot scheme ("Pilot Scheme") in a few designated cities in the Mainland (including Shanghai and four other cities in Guangdong Province, namely Shenzhen, Guangzhou, Dongguan and Zhuhai) and certain offshore regions (including Hong Kong, Macau and the ASEAN) |
| FEB 2010 | Hong Kong Monetary Authority ("HKMA") released "Elucidation of Supervisory Principles and Operational Arrangements Regarding RMB Business in Hong Kong", which enhanced operational efficiency and flexibility for Hong Kong and offshore RMB businesses and facilitated RMB trade and investments among enterprises. |
| JUN 2010 | The PBoC and the five supervisory units in the Mainland issued a notice on the extension of regions for the implementation of Pilot Scheme. Within the Mainland, the Pilot Scheme covered 20 provinces, autonomous regions and municipalities including Shanghai, Guangdong, Beijing, Fujian, Hubei, Jiangsu, Shandong, Sichuan, Tianjin, Zhejiang, Chongqing, Guangxi, Hainan, Heilongjiang, Inner Mongolia, Jilin, Liaoning, Tibet, Xinjiang and Yunnan in the Mainland. Outside the Mainland China, the coverage of the scheme has been expanded from Hong Kong, Macau and the ASEAN countries to all overseas countries and regions. |
| DEC 2010 | PBoC and the five supervisory units in the Mainland issued a notice on the expansion of Pilot Import Enterprises for the Cross-border Trade Settlement in RMB scheme, in which the number of enterprises has increased from 365 to 67,359, providing a new opportunity for the Cross-border Trade Settlement in RMB scheme to develop further. |
| JAN 2011 | PBoC released the circular on "Administrative Measures for the Pilot RMB Settlement of Outward Direct Investment(ODI)", not only providing a guideline for the Financial Institutions both offshore and onshore to conduct Outward Direct Investment practice, but also supplying a platform for the RMB capital account projects to develop healthily and steadily. |
| APR 2011 | SAFE released "Circular on Relevant Issues on Regulating the Operational Procedures of Cross-border RMB Capital Account Business"which illustrated the operational procedures of ODI and FDI in detail, further regulating the capital account related business and management. |
| JUN 2011 | PBoC released "Circular to Clarify Relevant Issues in connection with Cross-border RMB Business" regulating various operational procedures relating to the cross-border RMB business, including enhanced requirements for monitoring the flow of the RMB funds, conversion under trade that is only provided for the cross-border merchandise trade transactions, and the procedures for approval of RMB FDI application etc. |
| JUL 2011 | Hong Kong Monetary Authority ("HKMA") released "RMB Business –Position Squaring with the Clearing Bank and Net Open Position" clarifying the definition of eligible RMB conversion which can be squared by a participating bank with the clearing bank and the scope of such business, further regulating the conversion business in the CNH market. |
| AUG 2011 | The PBoC and the other five regulatory authorities in the Mainland released "Notice on the Expansion of the List of Regions for Cross-border RMB Settlement" expanding the Pilot Scheme to cover all regions in the Mainland, satisfying the needs of the Mainland enterprises, and facilitating RMB trades and investments. |
| OCT 2011 | Ministry of Commerce released "Notice on Cross-border RMB Foreign Direct Investment (FDI)" clarifying the regulations on the use of offshore RMB funds that have been acquired in compliance with relevant laws to conduct FDI project. |
| OCT 2011 | The PBoC released "Administrative Rules on Settlement of RMB-denominated Foreign Direct Investment" further clarifying the regulations on the cross-border FDI with offshore RMB funds acquired in compliance with the relevant laws. |
| NOV 2011 | Hong Kong Monetary Authority ("HKMA") released“RMB Business-Requirements on Position Squaring with the RMB Clearing Bank ." further clarifying the conditions and requirements of RMB conversion due for trade settlement. |
| FEB 2012 | The PBoC and the other five regulatory authorities in the Mainland jointly isuued "Notice Concerning Issues on Administration of Enterprises Engaging in RMB Trade Settlements for Merchandise Exports" |
| JUN 2012 | The PBoC released "Notice of Clarified Operating Rules on RMB Settlement Business in Relation to Foreign Direct Investment (FDI)" refining the rules in relation to the RMB account types, the use of RMB capital funds and RMB foreign debt under FDI. |
| DEC 2012 | The PBoC released "The Rules for the Implementation of the Interim Measures for the Administration of Cross-Border Rmb Loans in Qianhai "allowing companies registered and doing business or making investment in Qianhai may borrow Rmb loans from Hong Kong-based banks via settlement banks in Shenzhen. |
| JUN 2013 | The fixing will be calculated by averaging the middle quotes after excluding the highest three quotes and lowest three quotes provided by the 16 Contributing Banks. |
| JUL 2013 | The PBoC released "Notice on Simplifying the Process of Cross-border RMB Services and Improving Relevant Policies" enhancing the procedures of cross-border RMB trade settlement service to facilitate the utilisation of RMB as the cross-border trade settlement currency for both financial institutions and enterprises |
| FEB 2014 | The Shanghai head office of PBoC released "Notice on Supporting China (Shanghai) Pilot Free Trade Zone to promote Cross-border Use of RMB" specifying details on offshore RMB loans, two-way cross-border RMB cash pool and centralised cross-border RMB collection and payment. |
| JUL 2015 | The People’s Bank of China Guangzhou Branch released “the Interim Administrative Measures for Pilot Cross-border RMB Loan Business in Guangdong Nansha and Hengqin New Zones” which provide that eligible companies can borrow cross border RMB loans from banking financial institutions in Hong Kong and Macao. |
| SEPT 2015 | The People’s Bank of China released “Notice of the People's Bank of China on Further Facilitating Multinational Enterprise Groups in Operation of the Cross-Border Bilateral RMB Cash Pooling Business”having raised the ceiling on cross-border RMB fund flows for multinationals via cross-border Bilateral RMB cash pooling and lowered the threshold for enterprises participating in the business. |
| DEC 2015 | The People’s Bank of China released “Guiding Opinions of the People's Bank of China on Providing Financial Support for the Construction of China (Guangdong) Pilot Free Trade Zone”, “Guiding Opinions of the People's Bank of China on Providing Financial Support for the Construction of China (Fujian) Pilot Free Trade Zone”, “Guiding Opinions of the People's Bank of China on Providing Financial Support for the Construction of China (Tianjin) Pilot Free Trade Zone” defines the direction for the financial reform of the three FTZs. RMB capital account convertibility within the limits, management of external debt, and cross-border RMB utilization will be implemented in the FTZs. |
| APR 2016 | The People’s Bank of China released implementation rules on supporting the expansion of cross-border use of RMB in Guangdong, Tianjin and Fujian Free-Trade-Zones (FTZs) which mainly cover cross-border RMB settlement for residents within the zones, cross-border RMB cash pooling for multinational companies, issuing offshore RMB bonds for corporations within the zones, offshore RMB lending for banks within the zones, etc. |
| NOV 2016 | The People’s Bank of China published the “Notice of Further Clarifying Matters Related to Offshore RMB Loan Business Conducted by Onshore Corporates” (“Notice”). The Notice clarified that such business would adopt uniform macro-prudential management applicable to both local and foreign currencies. There were clear rules on the qualification of lenders, borrowers and loan usage purpose. The Notice also required the handling banks to conduct strict review, ensuring loans could be used in true and rational manners. |
| JAN 2017 | The People’s Bank of China issued “Notice on Matters Concerning the Macro-prudential Management of Cross-border Financing”. It allows PRC incorporated entity to borrow foreign loans based on its net asset value/capital on a risk weighted basis |
JAN 2018 |
The People’s Bank of China issued “Notice of the People's Bank of China on Further Improving Cross-Border RMB Service Policies to Promote Trade and Investment Facilitation”. It supports cross-border RMB settlement of enterprises, facilitates direct investment in RMB of overseas investors and the inbound remittance and use of RMB funds raised overseas by enterprises. |
In general, you can enjoy a comprehensive range of financial services for your RMB funds, similar to other foreign currencies like HKD and USD upon the condition that it does not involve funds flowing into the Mainland. Inward and outward RMB funds transfer to and from the Mainland has been extended to all the trades of goods, services, current transfers, ODI-related capital account transfers and other current account transactions authorised by the Mainland authorities.
