Banking in China

Regulatory information

Since 1979, mainland China’s banking structure has undergone fundamental changes.

Mainland China’s WTO accession has prompted greater access to the banking sector for foreign banks, with the following key developments:

• Since 1 January 2002, all foreign banks have been allowed to provide foreign currency-related services in
  China.

• Foreign banks can conduct Renminbi business with non-residents, foreign-invested enterprises (“FIEs”) and
  local corporations in specific cities in mainland China. Since December 2005, this has included the cities of
  Beijing, Changchun, Chengdu, Chongqing, Dalian, Fuzhou, Guangzhou, Harbin, Jinan, Kunming, Lanzhou,
  Nanjing, Nanning, Ningbo, Qingdao, Shanghai, Shantou, Shenyang, Shenzhen, Tianjin, Wuhan, Xiamen, Xi’an,   Yinchuan and Zhuhai.

Currency convertibility

The currency of transaction in mainland China is Renminbi. Renminbi is not an international currency and is only convertible according to relevant SAFE regulations.

Payments and cash management

The management of working capital in China has come a long way in terms of scope and techniques.

Companies operating in the country have increasingly found themselves presented by banks with solutions that are better tailored to their needs – from cash pick-up to electronic collection to outsourced reconciliation, from domestic cheque outsourcing to cross-border electronic payments over the web, from bank loan to intra-group entrusted loans to third-party entrusted loans, and from onshore Renminbi forwards to Renminbi swaps.

The key for companies is to understand their own needs and hold discussions with banking partners who can demonstrate the best capabilities, strong networks with local banks, and a long-term commitment to China.

Global markets

Mainland China's Foreign Exchange (FX) market is an emerging market experiencing tremendous growth.

Foreign exchange products that are available with HSBC in China include:

• Foreign currency against foreign currency: spot, forwards, FX swaps, currency swaps and other derivatives

• Foreign currency against Renminbi: spot, forwards and FX swaps

The availability for conducting all FX derivatives is subject to the nature of the underlying transaction.