Yesmy gets offshore yuan investment first
By Guan Wenfei and Hu Xiaoceng |
March 26, 2012, Monday
|
Print Edition
Print Edition
YESMY (Shanghai) Commerce & Trading Co has recently won approval from Jiading government, allowing its American investor Yesmy Limited to make a capital injection directly in offshore yuan. This is the first direct investment project using cross-border yuan in Jiading.
Yesmy, registered in Jiading's 3131 Creative Park, has the country's biggest online liquor shopping platform with more than 3 million members. Under China's former foreign-exchange management policy, Yesmy's foreign investor needs to deposit the foreign currency in the Bank of China's clearing account in Hong Kong, and then convert it to yuan for investment in the Chinese company.
"In recent years, the gradual appreciation of yuan has caused about 1 million yuan shrinkage in the investment received, which was converted from US dollar," said Yao Chunhua, Yesmy's general manager of corporate finance.
Last October, China started the cross-border yuan direct investment operation. Yesmy promptly opened a yuan settlement account at BOC Hong Kong upon hearing the news. Yao said the loss due to exchange rate fluctuations would likely be avoided by single-currency fund transfers. He is quite optimistic about the prospects from the new policy, because most investments received by domestic e-commerce players in recent years are from overseas.
The launch of direct investment in offshore yuan, however, will not lower the threshold of cross-board yuan settlement.
Yesmy, registered in Jiading's 3131 Creative Park, has the country's biggest online liquor shopping platform with more than 3 million members. Under China's former foreign-exchange management policy, Yesmy's foreign investor needs to deposit the foreign currency in the Bank of China's clearing account in Hong Kong, and then convert it to yuan for investment in the Chinese company.
"In recent years, the gradual appreciation of yuan has caused about 1 million yuan shrinkage in the investment received, which was converted from US dollar," said Yao Chunhua, Yesmy's general manager of corporate finance.
Last October, China started the cross-border yuan direct investment operation. Yesmy promptly opened a yuan settlement account at BOC Hong Kong upon hearing the news. Yao said the loss due to exchange rate fluctuations would likely be avoided by single-currency fund transfers. He is quite optimistic about the prospects from the new policy, because most investments received by domestic e-commerce players in recent years are from overseas.
The launch of direct investment in offshore yuan, however, will not lower the threshold of cross-board yuan settlement.
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