Treasury & Banking in China

Commentary

Do you remember the good old days, when the biggest issue many treasurers faced was implementing cross-border cash pooling with China? At CompleXCountries, we do – so we thought it was time to check up on the situation in China, as it starts to come out of the extended COVID restrictions, and the tensions between China and the US  continue.

Key takeaways:

• Business carries on in China. It is a major market for most large companies – several participants are doing acquisitions, or expanding their business operations. Business is growing: it is largely profitable, and generating cash.
• The regulatory environment remains complex, but easing continues. Cross border cash pooling works well, as does local pooling. In many places, it is now possible to settle tax and other statutory payments from accounts with foreign banks.
• Several participants are receiving cash via AliPay and WeChat, though none are yet using these tools to make payments. These settlements work well, but they create reconciliation problems, as the detail of the invoices being settled resides in a local system, which typically does not interface well to the international ERP systems.
• As is usual in China, there is some confusion over