Issue Two 2008
The China Banking Regulatory Committee (CBRC) recently announced that it will extend its Qualified Domestic Institutional Investors (QDII) scheme to allow Chinese commercial banks to invest their clients’ funds in Singaporean stocks and funds if certified by the Singapore monetary authority. The QDII scheme is part of the country’s drive to open up to global financial markets and it has continued to grow in China since its introduction in 2006. We discuss the QDII scheme in more detail and describe the history of its introduction in this issue’s Finance A-Z.
As Chinese markets open up and controls are gradually relaxed, managing a company’s finances will become more complicated as the financing options increase. There will also be a greater variety of investment options available and this would be a good time for companies to review their finances and ensure that they are maximising the use of their resources.
The concept of financial supply chain management is growing and many companies find it can be used to manage their finances more effectively. The treasurer is becoming increasingly responsible for financial supply chain management and in this issue’s Cash Management we follow on from the introduction to the supply chain, published in the last edition of Treasury Today in China, by describing the various financing options available. Large companies are now able to impose lengthy payment terms on their suppliers, who consequently may need to look elsewhere for additional finance. We provide an overview of some of the methods available, including a more in-depth look at the newer concept of supplier finance.
These issues will become more relevant as the Chinese markets continue to expand. There will inevitably be greater risks involved in doing business as the country continues to trade with a growing number of nations. Some element of risk is unavoidable, but treasurers may be able to implement controls in their own place of work to minimise the risks their company faces. We give practical and helpful suggestions on treasury control tools in this issue’s Treasury Management. As well as technical security tools, we describe some simple practices that can be implemented from front office to back in order to help protect a company from both internal and external risks.
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