Lee Beng-Hong, head of markets at Deutsche Bank China, rescheduled his interview with China Daily three times. He flies across the country to meet clients and business partners who want ever more to move the yuan in their pocket over the border.
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Lee said Chinese regulators will soon act to make those products a reality.
A day before Lee was interviewed on May 9, an accountant with Schneider Electric (China) Co Ltd loaned 450 million yuan ($72.93 million) to its parent company in France, Schneider Electric AG. The transaction was through a branch of Industrial and Commercial Bank of China Ltd in Beijing. It was the first time the company sent yuan home since coming to China 27 years ago. Previously, any cross-border remittances had to be transacted in foreign currencies and were subject to lengthy regulatory approvals.
The transaction was possible because of policy loosening by the State Administration of Foreign Exchange, the central bank unit managing China's $3.95 trillion in foreign exchange reserves. Earlier this month, SAFE allowed foreign companies in China to move funds freely between domestic and foreign accounts to a set quota it extended in a trial project nationwide.
That policy change, along with other similar policy-loosening from the central bank, has piqued excitement among global banks in China, eager to leverage their expertise in transacting internationally.
The same day Schneider Electric wrote the check, Deutsche Bank opened its seventh location in China in the China (Shanghai) Pilot Free Trade Zone. It's focused on yuan-denominated cross-border transactions and services range from yuan cash pooling and trade financing to cross-border lending and interest rate hedging.