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Yuan-backed FDI poised to take off
By Zhang Fengming |
September 13, 2011, Tuesday
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Online Edition
Online Edition
Companies are poised to test the water for yuan-backed foreign direct investment, a senior banker has said.
"Lots of companies, most of them multinational, have inquired with us on the new program," said Yigen Pei, treasury and trade solutions product head of Citibank (China) Ltd and Shanghai branch manager.
"The inquiries are from varied industries from various countries and regions, including US, Europe and Middle East."
Companies from the retail, industrial, electronics and chemicals sectors have all showed strong interest to jump on the yuan-backed FDI program, he told Shanghai Daily in an exclusive interview.
The bank has already started helping customers join a trial run of yuan-backed FDI, including shareholder loans, on a case by case basis under the guidelines of regulators.
The Ministry of Commerce in August released a draft regulation on yuan-backed FDI to solicit public opinions and has said it wanted to put rules into effect as early as this month.
Talking about the benefits of the program, Pei said it would help companies further utilize offshore yuan cash. "It can help to eliminate foreign exchange uncertainties for companies. It also offers another funding source for companies."
Pei said he has seen a strong need from customers for yuan-backed FDI as strong transactions are in the pipeline with more companies riding on the rise of the local currency.
"Renminbi is the hottest topic these days," Pei said. "It's a natural step to see the rise of the local currency with China's rising economic clout in the world."
The yuan-backed FDI also expands channels for overseas-acquired yuan funds to flow back into the country, he added.
China started testing cross-border trade settlements in yuan in Shanghai and four Guangdong Province cities and expanded the program to 20 provinces and municipalities in 2010. Cross-border trade settlements in yuan expanded countrywide in August 2011.
Foreign direct investment in China may exceed US$100 billion again this year, Yu Jianhua, assistant minister of commerce said earlier. China foreign direct investment rose by 18.57 percent year on year to US$69.19 billion in the first seven months of this year.
"Lots of companies, most of them multinational, have inquired with us on the new program," said Yigen Pei, treasury and trade solutions product head of Citibank (China) Ltd and Shanghai branch manager.
"The inquiries are from varied industries from various countries and regions, including US, Europe and Middle East."
Companies from the retail, industrial, electronics and chemicals sectors have all showed strong interest to jump on the yuan-backed FDI program, he told Shanghai Daily in an exclusive interview.
The bank has already started helping customers join a trial run of yuan-backed FDI, including shareholder loans, on a case by case basis under the guidelines of regulators.
The Ministry of Commerce in August released a draft regulation on yuan-backed FDI to solicit public opinions and has said it wanted to put rules into effect as early as this month.
Talking about the benefits of the program, Pei said it would help companies further utilize offshore yuan cash. "It can help to eliminate foreign exchange uncertainties for companies. It also offers another funding source for companies."
Pei said he has seen a strong need from customers for yuan-backed FDI as strong transactions are in the pipeline with more companies riding on the rise of the local currency.
"Renminbi is the hottest topic these days," Pei said. "It's a natural step to see the rise of the local currency with China's rising economic clout in the world."
The yuan-backed FDI also expands channels for overseas-acquired yuan funds to flow back into the country, he added.
China started testing cross-border trade settlements in yuan in Shanghai and four Guangdong Province cities and expanded the program to 20 provinces and municipalities in 2010. Cross-border trade settlements in yuan expanded countrywide in August 2011.
Foreign direct investment in China may exceed US$100 billion again this year, Yu Jianhua, assistant minister of commerce said earlier. China foreign direct investment rose by 18.57 percent year on year to US$69.19 billion in the first seven months of this year.
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