Treasury Today Country Profiles in association with Citi
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May 2011

Editorial

Issue Two 2011

For the best part of the past 50 years, Japan has held on to the coat tails of America as the world’s second largest economy in terms of GDP. February marked more than just the beginning of the New Year for China as its economy continued its explosive rise and saw it eclipse its neighbour. Japan’s GDP fell by 1.1% to $5.47 trillion in 2010. Over the same period, China reported a figure of $5.88 trillion. All in all, the Year of the Rabbit is shaping up to be an interesting one for the country.

The pace of the country’s economic growth is attracting the attention of multinationals with business in the Asia Pacific region. In this issue Treasury Today in China takes a look at the financial centres which have caught the imagination of corporate treasurers in Asia and examines the pros and cons of establishing a treasury centre in the region, looking at factors such as tax regimes, capital markets and regulatory climate (Treasury Practice). As well as evaluating some of the more established centres, such as Singapore and Hong Kong, the article explores the attractions of locations such as Japan, Manila, Malaysia and Brunei.

This issue, The Corporate View features Lisa Wang, Treasurer of the US/Europe-headquartered beer company Anheuser-Busch InBev. As the China treasurer of a company vying for business in the ultra-competitive Chinese alcohol market, Lisa has an interesting story to tell.

In the Question Answered section an expert answers a question on the topic of entrustment loans in the context of cash pooling, focusing on the essentials of the debt-to-equity ratio and the issues surrounding thin capitalisation rules. On a similar theme, Calculator Corner explains how to calculate EBITDA (Calculator Corner).

Concluding a series of articles on money market funds in China (China Focus), this issue’s China Focus article examines the role of the broker and investigates the regulatory issues which surround the money market funds in Asia. The slowly changing nature of regulations in the market contrasts sharply with the dynamic and risk-averse characteristics of investors.

With international investors eager to enter the Chinese market, and Chinese corporates equally keen to experience money market funds abroad, the clash of investment cultures and regulatory trends may come to the fore – and investors should be prepared to build relationships to understand those differences and likely future developments.

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