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Treasury & Capital Markets
Nansha FTZ enters RMB reform race
In a bid to extend liberalization of the renminbi to individuals, Guangdong’s Nansha free trade zone has announced a package of three reforms on August 24 involving cross-border use of the currency. The reforms indicate growing divergence and competition between free trade zones in their renminbi liberalization efforts.
Derrick Hong 25 Aug 2016
In a bid to extend liberalization of the renminbi to individuals, Guangdong’s Nansha free trade zone has announced a package of three reforms on August 24 involving cross-border use of the currency.  The reforms indicate growing divergence and competition between free trade zones in their renminbi liberalization efforts.
The first reform allows financial institutions to open current accounts for individuals for cross border renminbi settlement. Seizing this new opportunity quickly, CCB’s sub branch in the FTZ branch and CCB Asia have already rolled out a new debit card supporting this bilateral account. The card also allows offshore renminbi to be invested in onshore wealth management products. Anyone currently born or currently living and working in Nansha can apply for the card, regardless of the nationality of the applicants.
The second development grants individuals the right to borrow renminbi from Hong Kong and Macau to invest in tangible assets such as property in the FTZ.  Previously, only corporates in the FTZ were able to borrow renminbi offshore.  “All citizen of Guangzhou, Hong Kong, Macau as well as overseas jurisdictions are able to apply for the loans, creating new channels through which offshore renminbi can flow back to onshore market,” officials from the CCB Guangdong FTZ branch state.
The third reform allows individuals in Nansha to directly invest in overseas companies through equity investment using renminbi investment account.  With the upcoming launch of Shenzhen-Hong Kong Stock Connect, the new reform offers another channel for onshore investors to invest globally.
Guangdong’s three FTZs have been proactive in boosting renminbi internationalization. In April, for instance, the Guangzhou branch of the People’s Bank of China issued a notice in which it explicitly allows cross-border two-way cash pools for MNCs based in the free trade zones (Qianhai, Nansha and Hengqin).
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