HSBC and Intel have combined to pilot the first automated, cross-border sweeping structure in China.

The system will allow multinational companies to connect and pool their cash reserves, held in different currencies and locations across the world, including the Chinese mainland.

HSBC’s head of global payments and cash management, China Kee Joo Wong tells GTR that the new scheme will allow foreign companies to add their internal Chinese working capital to their regional liquidity management systems.

He says: “Specifically, for companies with surplus cash in China, the scheme will offer them a convenient channel to repatriate cash out of China to support their regional or global operations. Moreover, for companies that need incremental working capital in China, there is also a more simplified avenue for funds inflow into China, with the use of a combined borrowing limit at the pool header level that will certainly drive incremental efficiencies for companies investing into China.”

Wong says that launch has coincided with a period of previously unseen transparency in the Chinese market. He explains: “Clearly we have seen more transparency and clarity in the recent regulatory developments and believe that this pilot scheme is another major step that exhibits willingness and determination from China’s regulatory authorities to drive the reform of the financial market.”

2013 stands to be a busy year for the bank in China. Wong tells GTR that potential developments include cross-border netting schemes, automated renminbi cross-border pooling and pay-on-behalf/receive-on-behalf schemes to allow international treasurers to better manage their cash in China.

As yet, the facility has only been used by a small number of Chinese and foreign companies in Shanghai and Beijing. It is being monitored closely by the local authorities, with a view to expanding its usage.