Recently, the People’s Bank of China Chenzhou branch reported that in the first quarter of 2023, the amount of cross-border RMB settlement under current account and in direct investment in Chenzhou reached 692 million yuan, a year-on-year increase of 534.72%, accounting for 19.2% of the total cross-border settlement in the same period.

Since the launch of cross-border RMB services, the total amount cross-border receipts and payments settled in RMB was 18.3 billion yuan in Chenzhou.

“In the past, we used to settle payments in U.S. dollars. Now, we use cross-border RMB settlement, which has reduced our financial costs and increased our profits,” said Mr. Liu, the manager of an optoelectronic company in Hunan.

Chenzhou branch actively connects with enterprises, promotes the cross-border RMB overseas settlement product Export RMB Swift, helping businesses obtain better settlement rates and mitigate exchange rate fluctuation risks. To date, it has assisted the enterprise in an accumulative amount of 133 million yuan settled in RMB.

In order to increase financial support for foreign trade export, Chenzhou branch has urged all local bank institutions to optimize the processing flow for cross-border RMB services. This allows for “instant funds transfer”, enhancing the turnover rate of enterprise funds.

They also carry out regular publicity of cross-border RMB policies and provide policy guidance for foreign trade enterprises. They promote the risk-hedging function of cross-border RMB exchange rates and the advantages of reducing financial costs, guiding businesses to develop awareness of exchange rate risk and prioritize the use of RMB.

Mr. Tang, the head of a toy manufacturing company in Yizhang County, said that his company’s toy products are exported to Europe and the United States. Since the beginning of this year, they have received orders totaling over 70 million yuan.

With the support of Chenzhou branch, the company has gradually been using cross-border RMB to recover payments. From last year to now, the cross-border receipts has reached 222 million yuan.

Chenzhou branch organized bank institutions within its jurisdiction to promote cross-border RMB services to more than 80 foreign trade enterprises.

In these visits, they actively connected with enterprises. For example, during the bank presidents’ visit, Chenzhou branch visited a smart home electronics production company that primarily exports products to Europe.

After comprehensive assessment and evaluation, they applied for the title of “High-Quality Enterprise for Cross-Border RMB Settlement,” allowing the enterprise to enjoy fully online, lower-cost, and more timely cross-border RMB services. Since 2022, the branch has helped this enterprise accumulate 76.43 million yuan in RMB settlement.

A national high-tech enterprise in the field of new energy, expanded its global production scale in 2022 by investing in the construction of a factory in Malaysia. After understanding the enterprise’s cross-border investment needs, Chenzhou branch arranged a meeting to explain the convenience of cross-border RMB investment policies.

They helped the company remit its investment capital to its overseas subsidiary in RMB. As of the end of April 2023, the company had remitted a total of 920 million yuan.

To facilitate cross-border RMB investment and financing for local enterprises, Chenzhou branch issued a pilot program for cross-border RMB trade and investment facilitation.

The program not only provides more convenient cross-border RMB investment services but also offers comprehensive services for account opening and fund disbursement for overseas engineering projects.

From January to April 2023, Chenzhou had a cross-border RMB direct investment settlement volume of 371 million yuan, a year-on-year increase of 201.31%.

An energy group has invested nearly 300 million yuan in Chenzhou in photovoltaic power generation and smart energy projects. As the project’s shareholders include a Hong Kong-based company, capital injection from overseas was required.

After discussions with Chenzhou branch of the Construction Bank of China, the bank recommended cross-border RMB foreign direct investment services to the company. As of the end of April 2023, the two projects had remitted over 46 million yuan in capital in the form of cross-border RMB.

Furthermore, the Chenzhou branch has also encouraged local institutions to provide full-process guidance for cross-border RMB business for enterprises involved in foreign investment.

When a graphite materials company in Chenzhou had an urgent need to remit foreign investment funds back into the country, Chenzhou branch patiently explained foreign investment policies and subsequent fund usage requirements. They also dispatched a specialist to assist the company in on-site registration for foreign debt, ensuring the efficient handling of the cross-border RMB business.

As of the end of April 2023, all 21 million yuan in capital for foreign investment had been received and used, allowing the company’s graphite production and warehousing project to commence construction as scheduled.

Chenzhou branch has identified 66 high-quality cross-border trade enterprises to establish a list of key counseling enterprises. This initiative aims to resolve various urgent and challenging issues faced by market entities in cross-border settlements.

In 2022, the 66 key counseling enterprises in Chenzhou handled a total of 1.242 billion yuan in cross-border RMB transactions, marking a year-on-year increase of 47.85%.

These key counseling enterprises’ cross-border RMB transactions accounted for 73.05% of the city’s total. From January to April 2023, the cross-border RMB transactions of these key counseling enterprises amounted to 259 million yuan, a 6.2-fold year-on-year increase.

The branch has also encouraged local banking institutions to expand RMB cross-border financing channels to help key counseling enterprises reduce costs. When a Hunan-based new energy company had financing needs due to its production and construction activities, the Industrial and the Chenzhou branch of Commercial Bank of China promptly assigned a specialist to assist the company.

Upon learning that the overseas RMB loan interest rates were lower than domestic rates during the same period, the branch promptly recommended cross-border RMB loan services. 10 days later, the Chenzhou branch of Industrial and Commercial Bank of China, in conjunction with the Sydney branch, provided the company with a 20 million yuan cross-border RMB loan.

The China (Hunan) Pilot Free Trade Zone Chenzhou Area is also a key region supported for cross-border RMB transactions. The Chenzhou brunch uses a reward-and-punishment approach to vigorously promote the development of cross-border RMB business in the city’s free trade zone.

In 2022, the total amount of cross-border RMB business transactions in the free trade area reached 396 million yuan, a 145.96% year-on-year increase. From January to April 2023, the cross-border RMB business volume in the free trade area reached 198 million yuan, a 289.55% year-on-year increase.

Chenzhou Production and Investment Supply Chain Co., Ltd., located within the free trade area, primarily acts as an agent for enterprises within the free trade area to procure foreign non-ferrous metals, coal, grains, and other raw materials. They have a high annual trading volume and a significant short-term fund requirement.

The Chenzhou branch of Hunan Bank provided a 400-million-yuan supply chain credit revolving quota to ensure ample credit support for the company’s raw material procurement.

In addition, the Chenzhou branch of Agricultural Bank of China and the Chenzhou branch of Construction Bank of China coordinated with overseas branches to provide cross-border RMB settlement services for the company. Since the beginning of 2023, the company has paid over 170 million yuan for imported bulk commodities in RMB, representing a business volume increase of more than seven times.