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RMB capabilities

  • Investing

    With renminbi short-term securities, HSBC provides companies with new avenues to diversify balance-sheet cash positions and accumulated funds.

    Offshore investment

    Companies can choose between a range of renminbi-denominated investment products in offshore markets including deposits accounts; primary and secondary renminbi bonds; certificates of deposit; structured deposits; and money-market funds. There is no restriction on the use of renminbi accumulated offshore provided funds are not remitted back to the Mainland.

    HSBC’s offshore banking products include:

    • Time deposits and certificates of deposit (CD)
    • Primary and secondary renminbi bonds issued offshore
    • FX-linked structured deposits
    • Interest-rate linked structured deposits
    • Equity-linked structured deposits
    • Precious-metal linked structured deposits
    • RMB funds
    • RMB foreign exchange options
    • RMB equities
    • RMB Gold Exchange Traded Fund (ETF)
    • RMB A-share ETF

    Onshore investment

    Companies that generate surplus cash from operations on the Chinese mainland can turn to HSBC to make the most out of these funds. Our onshore renminbi fund offers attractive returns and we can tailor allocations to meet different liquidity and operating requirements.

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  • Investing

    Invest in China through a growing range of renminbi-denominated products from HSBC, available onshore on the Chinese mainland and in offshore markets worldwide.

    Access to Chinese investment themes has never been greater. HSBC offers access to the complete selection of renminbi securities traded offshore in London, Hong Kong and other markets as well as the onshore markets open to foreign investors.

    Renminbi markets open for investment

    We provide access to the complete range of investments in offshore renminbi (currency code CNH) in Hong Kong, London and other financial centres, which can be made with no restrictions from Chinese regulators. HSBC is also a leader in onshore investment (CNY), through various channels, including the Qualified Foreign Institutional Investor (QFII) and China Interbank Bond Market (CIBM) regulatory schemes.

    Investing offshore

    HSBC provides financial institutions wishing to invest offshore with renminbi deposits products, the Dim Sum bond market, structured products and money market funds. Renminbi-denominated equities are also becoming available in Hong Kong. Our solutions include:

    • Time deposits and certificates of deposit
    • Primary and secondary renminbi bonds issued offshore
    • FX linked structured deposits and notes
    • Interest-rate linked structured deposits and notes
    • Equity linked structured deposits and notes
    • Commodity-linked structured deposits
    • Renminbi funds
    • Renminbi equities
    • Shanghai-Hong Kong Stock Connect

    Investing onshore

    HSBC can help investors can take position in onshore capital markets in a variety of assets through the Renminbi Qualified Foreign Institutional Investors (RQFII) and CIBM schemes.

    We provide a one-stop package to help investors gain RQFII status through our sub-custodian banking services on the mainland. HSBC also provides its RQFII customers with global custody; FX arrangement; bond trading and execution; and related investment services. Investors who are eligible to become RQFIIs include asset managers, insurers, securities traders, sovereign wealth funds, central banks, supranational organisations and banks (local, commercial and private). Other eligible investors include pension funds, charity funds and government investment institutions.

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  • Trade

    56 per cent of international companies that currently do business in or from China expect to use more RMB over the next year while 27 per cent of companies that do not use the RMB expect to do so in the future. Moreover, 61 per cent of Chinese companies think that a foreign company willing to use RMB would gain a financial advantage over competitors that were not (HSBC survey, June 2015).

    You could negotiate better prices and reduce foreign exchange costs on your China trade by settling trade transactions in offshore renminbi, with HSBC. Chinese government liberalisation has made the renminbi into a fast-growing international trading currency. Total offshore cross-border reached RMB 11 trillion in 2015, nearly three and half times the levels seen in 2013.

    As of 2013, the RMB now accounts for over 18 per cent of total trade settlement in China. According to HSBC's 2014 survey 26 per cent of companies already use the RMB for cross-border trade settlement, and 20 per cent of those who don’t, plan to do so over the next three years.

    Cross-border trade settlement

    Invoicing in renminbi outside China is now unrestricted and your business can conduct almost all cross-border trade transactions with mainland Chinese companies in renminbi, using accounts and documentation support from HSBC. Since June 2012, all companies in mainland China with import and export qualifications can initiate and receive payments in renminbi for goods, services and other account items under China's Renminbi Trade Settlement Scheme. We also offer a wide range of renminbi trade financing and funding options (refer the Financing section of this website).

    Build your business on the Mainland with HSBC

    As a registered Chinese bank, we can help you establish and manage operations on the Mainland. HSBC will work with you to execute your expansion strategy, providing services such as to help with capital injection and reduction; payments; investments; and shareholder loans all compliant with Mainland authorities. Dividend payments can be paid and received in renminbi and there is no restriction on the maximum amount of individual renminbi payments for trade or capital accounts.

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  • Managing risk

    With foreign exchange hedging in renminbi, companies could reduce risks in invoicing and lower the transaction costs of trade and investment.

    As one of the most active participants in offshore renminbi foreign exchange and a registered dealer on the Mainland, HSBC provides companies with a comprehensive set of risk management instruments for trade and financing.

    Complete renminbi hedging tools

    HSBC provides deliverable forwards, options and swaps as well as access to the active non-deliverable market, which predates liberalisation of the renminbi.

    Offshore, HSBC clients can choose between renminbi non-deliverable forwards and options as well as an active deliverables market.

    Manage risks in mainland operations

    Companies wishing to transact on the Mainland can turn to HSBC to manage foreign exchange risks. We are the leading foreign bank in the interbank FX spot, forward and swap markets. HSBC provides deliverable currency and interest rate hedging tools, including swaps, options and forwards. We can help hedge all the transactions and transfers permitted by Chinese regulators, including debt and working capital repayment; income and expenses; capital injections; and income remittance.

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  • Managing risk

    Financial institutions now have a suite of instruments to hedge renminbi currency and interest-rate risks. Transactions on both the onshore and offshore renminbi foreign exchange markets now total over USD100 billion on a daily basis, including deliverable foreign exchange (FX) spot and deliverable/non-deliverable FX swaps and options.

    As one of the most active participants in offshore renminbi foreign exchange and a registered dealer on the mainland, HSBC gives financial institutions a complete set of risk management instruments.

    CNH deliverable market

    Offshore, HSBC quotes deliverable FX swaps up to two years and FX options up to five years with further tenors available on a case-by-case basis. Liquidity has risen significantly with daily turnover of USD17 billion for FX swaps and USD2-3 billion for FX options. HSBC also offers renminbi cross currency swaps, liquid up to five years or maximum tenor of ten years.

    CNY non-deliverable market

    HSBC offers the onshore investment (CNY) non-deliverable market which predates liberalisation of the renminbi. While non-deliverable instruments sometimes remain cheaper, the prices of deliverable instruments are converging rapidly as usage develops and are increasingly the tool of choice for hedging renminbi volatility. Daily volumes of non-deliverables are estimated at USD2-3 billion, including swaps and options.

    Onshore foreign exchange

    HSBC serves financial institutions who wish to transact on the onshore foreign exchange market – which has an estimated daily volume of USD75 billion – including swaps, options and spot. The bank also offers interest rate swaps with floating rate benchmarks based on the seven-day repo rate, Shanghai Inter-bank Offered Rate (Shibor) and CNY Depo.

    Note: Data above refers only to inter-bank market and all volumes are our estimate on inter-bank activities, as of March 2016 for onshore and February 2016 for offshore.

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  • Financing

    Renminbi financing allows international businesses to participate in the growth of the Chinese economy by using China's own currency to manage working capital, fund expansion, match receipts with payments and boost their profile in among Asian investors.

    Companies can fund renminbi offshore and on the Mainland with HSBC. Offshore, we offer full renminbi trade financing facilities, loans and the capability to raise bonds in a range of countries. All working capital, trade and receivables finance can be used outside China while bonds and loans raised offshore can be remitted onshore to finance business activities in China subject to approvals by the Chinese authorities.

    Offshore RMB borrowing and funding

    We are an active underwriter and lead manager in the offshore Dim Sum market, and have a leading position in placing bonds among investors active in this market. HSBC was ranked first in the league table of lead managers by Bloomberg as of Q1 2016.

    Total Dim Sum issues have risen dramatically since the market opened in 2010 with gross issuances reaching RMB520 billion by the end of 2014. In 2016 HSBC Global Research forecasts issuance of RMB260-300 billion as issuers look to move to the onshore market to take advantage of possibly cheaper financing rates.

    Companies looking to raise their profile in Asia can also raise capital through renminbi-denominated initial public offerings (IPO) in London and Hong Kong with HSBC.

    Onshore financing

    HSBC is there to help as a registered bank in mainland China with loans, bonds and trade financing facilities tailored to clients' requirements for onshore financing. HSBC China has been at the forefront of the recent developments in the Panda Bond market, underwriting a number of key transactions including HSBC (HBAP), British Columbia and South Korea issuances."

    *All financing is subject to a detailed credit assessment and approval.

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  • Financing

    With growing liquidity in the offshore market and with the onshore market opening up, renminbi debt capital markets provide financial institutions new avenues to diversify funding.

    Financial institutions can fund in offshore and onshore renminbi with HSBC.

    Diversify with Dim Sum

    We are an active underwriter and lead manager in the offshore Dim Sum market, and have a leading position in placing bonds among investors active in this market. HSBC was ranked first in the league table of lead managers by Bloomberg as of Q1 2016.

    Total Dim Sum issues have risen dramatically since the market opened in 2010 with gross issuances reaching RMB520 billion by the end of 2014. In 2016 HSBC Global Research forecasts issuance of RMB260-300 billion as issuers look to move to the onshore market to take advantage of possibly cheaper financing rates.

    Offshore channels

    Financial institutions looking for other offshore channels to fund can work with HSBC to raise bilateral and syndicated term loans; certificates of deposits; notes; and funds. Following the launch of the Hong Kong renminbi repo market in June 2012, HSBC bank can also help financial institutions borrow renminbi against a variety of collateral offshore such as government securities, equities and gold.

    Funding onshore and panda market

    As a registered bank on the Chinese mainland, HSBC offers financial institutions funding onshore with access to loans and arrangement of intercompany domestic loans. Although rates are converging, funds raised onshore are generally more expensive than offshore. As the onshore market opens up, we expect to see more opportunities for financial institutions*.

    *All financing is subject to a detailed credit assessment and approval.

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