The Treasurer’s Guide to Trade Finance

People’s Republic of China

ƒ China has reduced restrictions on the

number and type of firms permitted to

conduct forward and interbank forward

transactions. Firms wishing to invest in

forward and interbank forward earning are

subject to approval from SAFE.

ƒ Interbank RMB foreign exchange forward

transactions are permitted by qualified

interbank foreign exchange market

participants, who may also participate

in foreign exchange swap transactions

six months after they have received

authorisation. Qualified interbank foreign

exchange market participants may also

apply to carry out RMB and foreign

exchange currency swaps.

ƒ Foreign owned companies are permitted to

retain the proceeds from exports in a foreign

exchange account at foreign exchange

banks specified by SAFE. However, export

proceeds beyond a specified limit must

be sold off within five days in the local

foreign exchange market. Domestic entities

may repatriate foreign exchange income

domestically or abroad.

ƒ The proceeds from invisible transactions

and current transfers are required to

be repatriated, but, according to their

operational needs, domestic institutions may

retain foreign exchange receipts from current

account transactions in foreign exchange

current accounts.

China imports exports

Bank accounts

ƒ Local currency (RMB) bank accounts

cannot be held outside China by resident

companies. Non-resident companies can

open RMB trade current accounts outside

China with domestic banks for the purposes

of cross-border RMB settlement.

ƒ Non-resident companies can also hold local

currency bank accounts within China.

ƒ Subject to approval from SAFE, resident

companies can hold foreign currency bank

accounts both within and outside China.

Trade information

Key trading partners

Imports by origin

EU 12.1%

Japan 11.2%

South Korea 9.3%

Taiwan 7.2%

USA 7.1%

Other 53.1%

Source: WTO, September 2012

Exports by destination

EU 18.8%

USA 17.1%

Hong Kong 14.1%

Japan 7.8%

South Korea 4.4%

Other 37.8%

Principal exports

Electrical and other machinery, including data

processing equipment, apparel, textiles, iron and

steel, and optical and medical equipment.

Documentation

Imports

ƒ Bill of lading, certificate of origin, commercial

invoice, customs import declaration and

packing list.