treasurytoday in China
Over the coming 12 months, China faces the challenge of maintaining strong growth as the world economy verges on recession. Export orders are expected to decline as western nations deleverage their debt obligations. This poses a challenge to China’s export-orientated economy. In particular, the economic crisis in Europe has underlined the need for government authorities to wean the Asian tiger’s dependence away from export-orientated industries. Instead, China hopes to boost domestic demand by cultivating a more consumption-driven approach to economic growth.
“Treasury operations and regulations affecting them are changing at an alarming rate, making life challenging for corporates trying to stay at the cutting edge.”
In this issue of Treasury Today we focus on several important issues at the forefront of Chinese treasury affairs. First, we examine the current trends affecting the treasury landscape in our China Focus article. On the one hand, treasury operations continue to evolve, and there is a flourishing M&A activity – meaning more investment opportunities for MNCs. But on the other hand, treasury operations and regulations affecting them are changing at an alarming rate, making life challenging for corporates trying to stay at the cutting edge.
At the centre of this shifting treasury landscape lies the renminbi (RMB). Still strictly controlled, the yuan is gradually becoming an international currency. In late 2011, China took another step towards furthering its status as a global economic power: the world’s second largest economy relaxed controls on its currency for foreign investors. In this issue, our ‘Question Answered’ section looks at what the long-awaited ‘Renminbi Foreign Direct Investment Rules’ mean for the opening up of the currency.
Furthermore, as Asia rises, it becomes a more attractive place to set up shop – particularly with western economies performing poorly. Multinationals, such as Samsonite and Prada for example, have taken to launching initial public offerings (IPOs) to take advantage of the booming equity capital markets in the region. In this edition’s Treasury Practice article, we examine the pros and cons of IPOs in Singapore and Hong Kong – two leading financial centres in the region.
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