China issues new regulations on MNC cross-border cash pooling

HONG KONG - ANZ Bank says Chinese authorities can still regulate the extent of capital flows, despite the release of new regulations on the cross-border RMB cash pooling structures of multinational corporations (MNCs).

The changes were announced this week by China's State Administration of Foreign Exchange (SAFE.

ANZ says: "We believe the most recent change represents only a refinement of the current regime, aiming to integrate previous regulations and improve their overall consistency. (But) the relaxation is operational as individual transactions do not require prior approval.

"However, since the SAFE will still impose an annual quota, the authorities can still regulate the extent of capital flows.

"As such, the impact on the yuan's exchange rate market is limited." www.live.anz.com (ATI).