Treasury Today Country Profiles in association with Citi
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July 2010


Issue Four 2010

The Chinese authorities continue to open up the country’s banking and financial sectors to international business. One of the most significant milestones in recent months was the announcement of a trial plan to allow the conversion of foreign exchange into renminbi, in order for foreign investors in the Pudong New Area to be able to access the RMB private equity fund industry. This is a significant step forward for foreign investors, who were previously excluded from such ventures.

In-country progress is also being made, with an e-banking pilot scheme now approved by the State Administration of Foreign Exchange. Importantly, this loosening of regulation and interest in new financial technologies is starting to filter through to the end user. In this issue’s Question Answered, for example, we look at the increasing use of mobile payment technology in China and the drivers behind this growing payment method.

As with all financial transactions, mobile or otherwise, risk is always a concern. Treasurers have such a variety of risks to contemplate, ranging from FX risk and operational risk to environment risk, that it is often difficult to manage all of those risks effectively, or indeed prioritise them. This issue’s Treasury Practice looks at the main risks facing treasurers today and the importance of understanding how these risks can affect your business.

Investments are inevitably associated with risk. Even so-called ‘risk-free’ investments carry the risk that a better return could have been achieved elsewhere. However, one investment vehicle that is becoming increasingly popular in China due to its ability to offer security, liquidity and yield is the money market fund (MMF). In this issue’s China Focus we provide an overview of money market funds and look at the benefits and risks of investing in MMFs in China.

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