by Anthony Yuen Tung Lin, Managing Director, Head of Corporate Banking Coverage, Head of Trade Finance & Cash Management Corporate, Deutsche Bank (China) Co., Ltd.
Ever since the beginning of RMB internationalisation more than five years ago, many MNCs have begun to conduct international trade in CNY for several reasons, namely, cost savings, improvements in efficiencies and to enhance risk management.
Many of these MNCs have been very successful in penetrating the China market as a result of this. Due to local regulatory constraints, a surplus in cash and profit cannot be repatriated efficiently which have resulted in what we know as the ‘cash trapped’ issue.
However, as a result of recent regulatory developments, repatriating cash and including onshore RMB within a regional or global liquidity structure is now achievable, with proven success.