Beijing Strengthens Cross-Border Liquidity with New FX Policy
China is advancing corporate liquidity management, with Beijing at the forefront of recent regulatory shifts. On January 22, SAFE's Beijing branch introduced new guidelines for integrated domestic and foreign currency cash pools, allowing BOC Beijing to execute the first transaction under the new framework in partnership with Sinochem Finance.
This initiative is part of a broader 2024 policy upgrade by PBOC and SAFE, aimed at enhancing cross-border liquidity pools, simplifying compliance, and improving capital efficiency. By lowering funding costs and streamlining fund transfers, it reinforces Beijing's position as a key global financial center.
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Expanded Flexibility for Multinationals
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Sinochem Finance has been a proactive participant in China's evolving cash management landscape. In collaboration with BOC Beijing, it has pioneered several landmark transactions, including the 2021 integrated cash pool pilot.
BOC Beijing serves nearly 100 corporate groups, managing over RMB 2 trillion in cross-border transfers. The latest regulatory update allows firms like Sinochem Finance to further centralize transactions, expedite RMB lending, and reduce administrative barriers in compliance processes.
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Strengthening Financial Openness
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BOC Beijing facilitated transactions for major firms, including Sinomach, Genertec Finance, and COFCO Finance, all of which benefit from enhanced capital mobility and greater efficiency in fund allocation. By aligning with global treasury practices, these reforms increase China's appeal as a hub for multinational financial operations while bolstering the competitive edge of Chinese banks in cross-border services.
As Beijing continues refining cross-border financial policies, institutions and corporate treasuries will evaluate their implications for capital efficiency and risk management. With ongoing regulatory support, these measures are expected to drive deeper financial integration, increased investment flows, and broader economic openness.
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