Treasury Strategy & Transformation
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The Next Chapter in Regional and Global Treasury Management

by Emmanuelle Fischer, Head of Cash Management Marketing and Product, and Benoit Desserre, Global Head of Payments & Cash Management, Societe Generale

Changing patterns of international trade are having a profound impact on the way that corporations across all industries manage cash, liquidity and risk. Not only are new trade routes emerging, such as between Asia and West Africa, but changes in regulation and business culture are resulting in new opportunities for managing cash in countries such as China. By engaging the solutions, services and expertise of the right banking partner in key growth markets, treasurers can leverage these new opportunities to enhance visibility, efficiency and control over cash and risk.

Changes in regulation and business culture are resulting in new opportunities for managing cash in countries such as China

Re-evaluating strategy

There are a number of important developments taking place in Asia Pacific that are prompting corporations to re-evaluate their cash and treasury management strategy, and consequently, the way that we at Societe Generale support their evolving needs. The rapid and transformational changes in China are one such example. During the early stages of China’s liberalisation programme, many companies decided to ‘wait and see’ as new opportunities for using RMB to settle cross-border trade, and manage cross-border liquidity unfolded. Furthermore, given the restrictions and need for authorisation by PBoC (People’s Bank of China) or SAFE (State Administration of Foreign Exchange) for a wide range of activities, many companies continued to manage cash and treasury management in China separately from the rest of the group, excluding it from regional or global cash management strategies.

A catalyst for change

For many companies, however, the launch of the Shanghai Free Trade Zone (SFTZ) in 2013 was a significant milestone in the process of regulatory reform that has been taking place over recent years, signposting a number of new opportunities. For example, domestic and cross-border cash pooling has been challenging in the past, and while early changes to regulations enabled various workaround solutions to be developed, cash pooling is now far easier, not least as it is now officially recognised. While initially these opportunities are being made available in the SFTZ, they are rapidly being extended more widely, such as the ability to include onshore RMB as part of a regional cash pool.