Taxonomy term

Bank Relationships & Cash Management in China

Read more about Bank Relationships & Cash Management in China

Report date:

7 May 2025

Commentary

China is in the news a lot at the moment. Interestingly, this – well attended - call was very much in line with our usual discussions on the country: not a single mention of trade wars or tariffs. On the other hand, there was a lively discussion about all the usual issues related to pooling cash and managing banking relations – issues which show no sign of going away.

All peers on the call reported that business was strong, with most generating cash. They also repeated a theme familiar to people who know China: contrary to the common perception of a highly rigid and regimented society, there is a lot of confusion as to what the regulations actually are, and there are regular inconsistencies in how they are applied.

This “summary” is long (the full report is 15 pages of granular detail): a lot of details were discussed, and these are generally appreciated. As always, these are the experiences and views of our peers, (lightly) edited for clarity.

The main topics:

Domestic cash pooling: many, but not all, peers practice this. However, they do all come up against limits related to the equity of the pool header.
Cross-border pooling: this is where there is the most uncertainty.
- There are two main schemes, operating under licences provided by either PBOC (People’s Bank of China) or SAFE (State Administration for Foreign Exchange). These have different quotas, rules and requirements and approval delays.
- There has been talk for some time that the two schemes will be merged, but there is little concrete evidence this is happening.
- It has been suggested that, while existing schemes continue to operate, the approval of new ones has been slowed. Several peers are looking to implement new...

Please LogIn /Register to access the full commentary and a further 150+ similar commentaries. If you receive our newsletter - use your email to LogIn / Request Password Reset

Topics covered in this report:

Cash Pooling - cross border, Cash Pooling - domestic, Bank Relationships, Bankers Acceptance Drafts, Money Market Funds, Investments

Service providers discussed in this report:

Bank of America, Bank of China, Agricultural Bank of China, Bank of Ningbo, Citi, JP Morgan, Standard Chartered, HSBC, DBS, China Merchant Bank, ICBC, Union Pay, WeChat Pay, Alipay

Please log in, or create a free account, to read the whole report summary.

Payment Platforms & Collections in China

Read more about Payment Platforms & Collections in China

Report date:

22 Jun 2022

Commentary

Cryptocurrency, digital wallets, virtual everything – there is a huge amount of change. China has been at the forefront of a lot of digital trends, partly due to the fact it had an antiquated banking system which has been thoroughly modernised, and partly because the explosion of internet shopping in the country required a digital payments solution. This is a challenge when there are no credit cards.

This report is based on a Treasury peer Call which explored how this is affecting members’ companies, and how they are adapting to this brave new, digital, world.

Most participants are accepting payment using WeChat Pay and Alipay. None is using these tools to make corporate payments.
The collections process using these tools is efficient and effective: you work with a third party (usually accessed via a banking provider), who will transfer the funds to your account the following day. One participant did an RFP, with two Chinese and two foreign banks, and found the service was identical – though pricing was different, and not transparent.
There was no mention of billbacks, the excessively high fees and acquirors which blight the use of credit cards in other countries
The one complaint all participants had was the difficulty linking this process to internal systems, for the reconciliation of receipts or for compliance purposes in terms of identifying the source of cash. The third party companies do provide detailed lists of payors, but it can be difficult to upload these into the ERP system.
There was a lot of discussion about....please sign in to continue

Please sign or set up a free registration to read the rest of this commentary on China and get access to all CXC commentaries together with occasional free reports. (if you receive our updates, use your email to re-set your password)