China expands cross-border cash pooling policy for multinationals, effective on Monday
A view of the core Lujiazui commercial area in Pudong New Area, Shanghai on July 15, 2025. (Photo: VCG)
China has extended its cross-border cash pooling policy for multinational companies operating in the country, effective Monday, in another step that experts say will deepen financial opening-up and facilitate cross-border trade and investment.
The policy, outlined in an official notice on multinational companies’ domestic and foreign currency cross-border cash pooling operations, took effect on Monday, according to a statement released by the State Administration of Foreign Exchange (SAFE).
Under the new rules, multinational companies are allowed to decide on their own the proportion of funds to be centralized, and manage domestic currency, the yuan, as well as foreign currency funds, at a single account. This arrangement enables group-level centralized allocation while preserving flexible use by member companies under the same group, and encourages businesses to prioritize the use of the local currency in business operations, CCTV News reported on Monday.
By doing this, China is pushing cross-border fund management toward institutional opening-up and creating a more unified channel for cross-border financial connectivity, analysts said.
The nationwide implementation marks another step in China’s efforts to deepen financial opening-up and improve the business environment for multinational companies operating in the country, said Dong Shaopeng, a senior research fellow at the Chongyang Institute for Financial Studies at Renmin University of China.
According to Dong, it gives multinational companies, especially smaller groups, greater flexibility in cross-border fund scheduling, centralized pooling and unified payment, which will help reduce idle funds and cross-border settlement costs, while supporting wider use of the yuan in cross-border transactions.
Previously rolled out as a trial program in selected regions, the policy has now been expanded nationwide to benefit a wider range of business entities. For parent companies registered in pilot free trade zones, the threshold for setting up a cash pool can be lowered further, according to SAFE.
Under the policy framework, multinational companies can consolidate their foreign debt and overseas lending quotas of a group’s member firms, improving efficiency in cross-border fund management at the group level while preserving flexibility at the subsidiary level.
The policy will streamline administrative procedures. Registration will be handled through a “single window” at the SAFE branch where the parent company is located, while some change-registration procedures can be processed through its partner banks.
The new policy reflects China’s ramped-up efforts to optimize cross-border fund management for multinational companies, improve convenience in cross-border trade and investment, and better support the high-quality development of the real economy, Dong noted.
As the pace of going global and bringing in foreign investment continues to accelerate, more multinational groups are seeing frequent cross-border fund flows and increasingly diversified currency structures, which require stronger treasury coordination and risk management, Dong said.
He added that the nationwide rollout will help build a more unified channel for financial connectivity between China and overseas markets.
China will continue to optimize cross-border fund management for multinational businesses, enhance the convenience of cross-border trade and investment, and better support the high-quality development of the real economy, according to SAFE.