China continues to be a key driver for the global economy. At the same time, changes in the market are making for a dynamic and evolving treasury landscape. We offer perspectives on how companies may consider integrating China into their broader global treasury management as it becomes an ever larger part of the business of many of the world's leading multinationals.

Amidst a slowing Chinese economy, the renminbi (RMB) has evolved into a viable currency for cross-border trade. While onshore foreign exchange (FX) markets remain tightly regulated, the launch of the Shanghai Free Trade Zone (SFTZ) has improved offshore access. Free Trade accounts provide more flexibility to deploy SFTZ-based hubs to access offshore funding and FX markets. With the launch of three more Free Trade Zones in Guangdong, Tianjin and Fujian, the options will continue to grow.

Indeed, in the newer offshore RMB market (also known as the CNH market that was first established in Hong Kong in 2010), CNH spot and derivatives trading volumes have been growing and spreads tightening year-on-year at the expense of the much older and traditional RMB non-deliverable forward (NDF). As an indication that the RMB is firmly on the path towards becoming a global reserve currency, the International Monetary Fund recently agreed to include the RMB in its special drawing rights basket as the fifth constituent, alongside the US dollar, yen, pound and euro.

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