Quarter Two 2006
Banking practices and payment systems in China differ significantly from those in the US and Europe. Consequently, treasurers in China – particularly those working for foreign multinational companies – have to adopt a different approach to those taken by their colleagues in other countries. While the recent deregulation of the financial system has made it easier to operate a treasury in China, the rapidly changing nature of the Chinese market adds to the challenges faced by the treasurer. The China Quarterly Review explores these issues in depth…
A wealth of different payment systems and instruments are currently in use in China and they are evolving rapidly. Many of these payment instruments are unique to China, and have developed in response to the specific challenge of making reliable and efficient payments across a vast geographical area. Technology, particularly the internet, has made large inroads in bridging these gaps, connecting distant companies and banks for the first time. It is vital for the treasurer operating in China to understand both the latest developments in the payments landscape and the intricacies of more traditional methods. Our article on payment systems in China provides a guide to the systems currently in use and discusses likely future developments.
Building and maintaining strong relationships with partner banks is an important part of the treasurer’s role. Good management of banking relationships can pay dividends for the treasury, especially with regards to improved customer service and lower banking fees. The issue of banking relationships is particularly pertinent in China this year, as local and foreign banks ready themselves for the advent of equal competition at the end of 2006. Our article on bank relationships looks at different types of banking relationships and explores how such relationships can be managed effectively.