At the end of Apr 2016, China Sate Administration of Foreign Exchange (“SAFE”) issued a set of “Operating Rule of Foreign Exchange Administration Regarding the Implementation of Pilot Scheme for Macro Prudential Management of Cross-Border Financing”, signaling that the Policy has been put into practice.

Having reviewed the key points of the Policy and focused market segment, coupled with paying close attention to movement of onshore and offshore FX rates, ABC Singapore Branch successfully closed a transaction of RMB50million in cross-border financing to a subsidiary of a state-owned enterprise. This marks the Singapore Branch’s foray to respond positively to the Policy; a step we believe to be in the right direction. The cross-border financing unifies the approach of foreign debt administration in providing additional foreign debt limits for Chinese-capital enterprises and improving the autonomy and flexibility of offshore financing. Besides, it also enables domestic Chinese companies to raise money from cross-border financing and reduce funding costs effectively.

To date, PBOC has extended the implementation of this Policy to all non-financial enterprises established in China after piloting this in four free trade zones. It is deemed that in the future, the Policy will be widely used to serve price-sensitive companies in China.