After a relaxation of the rules by China’s central bank, HSBC has extended its automatic cross-border sweeping solution for renminbi (Rmb) outside the Shanghai Free Trade Zone.

The People’s Bank of China (PBOC) approved a new cross-border liquidity management model in November 2014, which allows companies to transfer local currency automatically across borders. Previously, the bank had only permitted sweeping in and out of the Shanghai FTZ.

HSBC has rolled the tool out for two clients: chemicals and technology company Johnson Matthey and Hong Kong-based textiles manufacturer Texwinca.

For Johnson Matthey, the bank implemented a solution allowing it to sweep Rmb from its Shanghai hub to its Asian cash pool in Hong Kong, giving its pan-Asian subsidiaries better access to liquidity.

Meanwhile, HSBC assisted Texwinca in transacting Rmb from its Guangdong centre in southern China to Hong Kong. For a company whose main retail business is in China, it allows it to put money in and out of its Mainland operation more quickly and efficiently. The Texwinca CFO Edward Chan said the solution allows it to “raise our capital efficiency”.

When cross-border sweeping was piloted out of Shanghai early in 2014, the trade industry welcomed it but grumbled about the material value. At this stage sweeping was in reality one-way, since net inflow from overseas was not permitted to exceed the amount leaving China.

The new rules seek to make flows more liberal and even, with treasurers and financiers remarking on the cash management flexibility allowed by the new rules.

“The new solution meets our desire to integrate our domestic Rmb cash pool in China with our global funding and cash management model. The structure allows us to consolidate our operating cash in China with funds in other Asian locations in a multi-currency notional cash pool based in Hong Kong which can be managed as part of the global position. We are very pleased to see the latest policy development in China and look forward to exploring further opportunities in China in the future,” says Julian Tasker, group treasurer of Johnson Matthey.