- China's challenging environment experienced significant infra-structure and regulatory improvements recently, enabling better cash management by multinational corporations (MNCs).
- Structures such as holding companies, foreign-invested companies limited by shares, and entrusted loans offer other treasury alternatives, subject to approvals and taxation regulations.
- Corporate restructuring through centralised functions has also proven effective for many MNCs, as has the relocation of regional headquarters and shared service centres to China.
- As one of China's largest investors, Philips has considered these techniques to better its treasury team, corporate structure, and management of group liquidity.
Cash and treasury management in China has never been easy, even for top-tier multinational corporations (MNCs). Complex regulations, foreign exchange controls, a lack of tax and treasury consolidation mechanisms, limited investment products, unique operating conditions, and a developing banking and clearing infrastructure are all factors inhibiting the implementation of effective cash management techniques widely used in other countries.
