On the occasion of the first anniversary of inauguration of China (Guangdong) Pilot Free Trade Zone, Guangzhou Branch of the People's Bank of China released the Notification on Supporting China (Guangdong) Pilot Free Trade Zone to Expand Cross-Border Use of RMB, which lays emphasis on five innovative operations in the free trade zone, including cross-border RMB operation for current accounts and direct investment of individuals in the zone, cross-border bi-directional RMB capital pool of multinational groups in the zone, inflow of funds raised from RMB bonds issued overseas by financial institutions and enterprises in the zone, domestic use of fund raised from Panda Bonds issued by overseas parent companies of enterprises in the zone, and overseas RMB loans offered by banks in the zone.

 

A person in charge of Guangdong Branch of Agricultural Bank Of China said that, the new policies of the free trade zone have expanded the cross-border RMB operations for individuals, optimized the conditions for access of clients to cross-border RMB capital pools, enlarged amount of net capital inflows and contributed to meet the demands for domestic use of funds from bonds issued overseas by domestic financial institutions and enterprises, domestic use of funds from Panda Bonds and RMB loans offered by banks in the zone to overseas organization and for overseas projects. The new policies will provide further support for organizations and individuals in the free trade zone to use RMB to deal with cross-border trade, financing and investment.

 

It was learnt that, Guangdong Branch of Agricultural Bank Of China has reached agreement with 10 multinational groups in the free trade zone on intention for operations concerning cross-border bi-directional RMB capital pools, and planned to offer an overseas loan of RMB200 million to the overseas company of a central enterprise and make a breakthrough in cross-border RMB operations for direct investment of individuals in the zone.

 

The Bank of China also said that it has launched operations concerning cross-border bi-directional RMB capital pools under the new policies of the free trade zone for a number of enterprises and taken a lead to start operations for cross-border direct RMB investment of individuals in the free trade zone in accordance with the new policies. In addition, it is preparing to launch more projects in the fields of cross-border RMB bonds and overseas RMB loans.

 

Source: Translated from Invest Guangzhou, April 18, 2016