China Rolls Out Nationwide Cross-Border Cash-Pooling Program

By Wang Shiyu

China has rolled out a cross-border cash-pooling framework, allowing multinational corporations to integrate domestic and foreign currency management and giving existing participants up to a year to transition under the finalized rules.

The scheme, which was previously limited to 10 pilot regions, including Beijing and Shanghai, has been expanded nationwide, according to a notice jointly issued Friday by the People’s Bank of China and the State Administration of Foreign Exchange.

The finalized rules cover enhanced cash-pooling arrangements, which are characterized by higher entry thresholds, larger transfer quotas, and greater operational flexibility, and aim mainly at large multinational companies.

The notice sets out eligibility requirements for multinationals seeking to participate in the cash-pooling scheme, including having a combined annual cross-border payments volume of at least 7 billion yuan ($970 million), a total annual domestic revenue of no less than 10 billion yuan in the previous year, and a total annual overseas revenue of at least 2 billion yuan in the period, according to the notice. Corporate groups must also include at least three member entities across domestic and overseas operations, it said.

Compared with a draft released in April, the finalized rules extended the transition period for companies to migrate existing cross-border debt and lending balances into the framework.

Banks involved in the program will be subject to stricter compliance requirements. Institutions with recent violations in cross-border payments or anti-money laundering controls will be barred from onboarding new clients under the scheme.

The nationwide rollout builds on a pilot launched in 2021 and expanded to multiple regions in 2022, as regulators seek to balance corporate funding flexibility with oversight of cross-border capital flows.

caixinglobal.com is the English-language online news portal of Chinese financial and business news media group Caixin. Global Neighbours is authorized to reprint this article.

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