The Beijing Foreign Exchange Management Department has recently introduced and implemented the "Regulations for the Centralized Operations and Management of Cross-border Funds in Domestic and Foreign Currencies for Multinationals (Trial)".

The pilot policy, initially implemented in Beijing, represents a crucial step taken by the People's Bank of China and the State Administration of Foreign Exchange to enhance the capital city's opening-up efforts. Moreover, this policy will contribute positively toward promoting streamlined trade, investment, and financing processes, enhancing the business environment, and supporting high-quality economic development in Beijing.

The pilot policy aims to combine the strengths of the current cross-border two-way renminbi capital pool and foreign currency capital pool in order to achieve the following objectives: 1) Improve and streamline existing policies for centralized cross-border capital operations of multinationals, ensuring that a wider range of enterprises can benefit from these policies. 2) Enhance the flexibility of cross-border capital operations for enterprises, allowing multinationals to independently determine the ratio of foreign debt and overseas loans in their capital pooling based on macroprudential measures. 3) Enable multinationals to effectively use renminbi for centralized cross-border capital operations. 4) Streamline the filing process and simplify the review of relevant documentation for fund utilization purposes.

The current pilot policy presents a valuable opportunity for multinationals to tap into the resources of both international and domestic markets. It effectively enhances capital management efficiency, mitigates exchange rate risks, and reduces financial costs. As a result, cross-border trade, investment, and financing will become more streamlined, enabling the city to offer superior services for the high-quality advancement of the real economy.