- HSBC among the first foreign banks to complete RMB cross-border lending deals under China’s expanded pilot scheme
HSBC has successfully facilitated cross-border renminbi (RMB) loans for mainland China corporates operating from the Nansha Free Trade Zone (FTZ) and Kunshan, areas that are now participating in China’s cross-border RMB lending pilot.
HSBC is among the first foreign banks to complete such transactions under the cross-border RMB lending pilot which was extended in July 2015 to the Nansha and Hengqin FTZs in the southern province of Guangdong and Kunshan Deepen Cross-Strait Industrial Cooperation Experimental Zones in the eastern Jiangsu Province.
In Nansha and Hengqin, companies are now able to borrow in RMB from banks in Hong Kong and Macau. Additionally, in Kunshan, Taiwanese corporates are allowed to borrow RMB from banks in Taiwan.
Under the pilot scheme, HSBC has assisted a leading feed producer in Nansha to borrow RMB20 million from HSBC Hong Kong, and a Taiwan-invested electronics company in Kunshan to obtain a RMB15 million loan from HSBC Taiwan. The loan proceeds would be used to support the companies’ business developments in their respective areas.
HSBC Greater China Chief Executive Helen Wong said: “The two transactions signify rising corporate needs for cross-border RMB financing in the Greater China region. As a leading international bank for RMB businesses worldwide, HSBC is pleased to see that RMB is being used more widely, beyond settling trade with mainland China. This paves the way for the currency to become a reserve currency in the near future. We believe China’s new FX fixing mechanism and more FX reforms in the pipeline clearly indicate that China is committed to making the RMB fully convertible sooner, rather than later.”
Back in 2013, HSBC was among the first banks to assist companies in Qianhai, Shenzhen to borrow in RMB from HSBC Hong Kong, when the cross-border RMB lending pilot was initially launched there.
HSBC has been a leading international bank in cross-border RMB business in the Greater China region and remains at the forefront of market developments. With an RMB service network covering more than 50 countries and territories around the world, HSBC was the first international bank to conduct cross-border RMB settlement in six continents.