Channels ready for cross-border Rmb flows?
October 12, 2011 | BY
clpstaff &clp articlesOver the past few years, China has been creating channels to allow a two-way cross-border flow of Renminbi (Rmb) funds to internationalise its currency. As the legal framework for this is still nascent, investors need to be cautious of practical hurdles and uncertainties
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A Chinese geomantic (feng shui) theory believes that flowing water symbolises the flow of money, which tends to bring about luck and prosperity. There is no doubt that the PRC government has come a long way in establishing a regulatory regime to facilitate the outflows and inflows of the domestic currency, Rmb since 2009 for the settlement of international trade payments and investment. This article aims to provide an overview of the current legal framework for two-way cross-border Rmb flows and to discuss possible future developments in this regard.