HSBC Helping Chinese Firms With Foreign-Currency Management

Corporations in the Shanghai Pilot Free Trade Zone, dubbed “Shanghai FTZ,” now have a centralized foreign currency management solution under a new service HSBC launched last week.

HSBC is delivering the new service to a German multinational corporation via its subsidiary in the zone, HSBC said in the product announcement. The solution is designed to provide greater convenience and transparency in cash management, the bank said.

The undisclosed German company, which has established more than 20 subsidiaries in China, will use the service to set up a cross-border sweeping structure via its subsidiary in the Shanghai FTZ to deploy foreign currency funds more efficiently between its overseas and domestic affiliates. The company also will use the service for other purposes, such as setting up a centralized foreign currency exchange to enhance efficiency of working capital management.

The “centralized foreign-currency management solution is an effective way for multinationals in the Shanghai FTZ to manage their working capital,” Julia Wu, managing director for banking in China at HSBC Bank (China) Co. Ltd., said in a statement. “HSBC has been staying at the forefront of the financial innovation in Shanghai FTZ. We will continue to leverage our global network and expertise to drive product and service innovation and support the needs of our customers in the zone.”

HSBC says it was the first foreign bank in China to help companies to set up a cross-border foreign currency sweeping structure and to implement netting solutions when China launched a pilot for a small group of selected multinational corporations in 2012. It also was an early player among foreign banks to offer RMB cross-border centralized transaction management solutions for companies in Shanghai FTZ earlier this year.