China: The launch of the Cross-border RMB Loan Policy in Nansha and Hengqin

Last Updated: 20 July 2015
Article by Xueli Cheng and Roy Zhang

On July 10, 2015, the People's Bank of China Guangzhou Branch issued the Interim Administrative Measures for Pilot Cross-border RMB Loan Business in Guangdong Nansha and Hengqin New Zones (the "Measures"), which provide the relevant enterprises in Guangdong Province with a new cross-border financing channel and create an additional reflux channel for overseas RMB capital. The promulgation of the Measures indicates that the preferential policy of cross-border RMB loan has been put into place in all three sub-zones of the Guangdong FTZ, i.e., Qianhai, Nansha, and Hengqin.

KWM Shenzhen Office is assisting a Hong Kong bank in handling one of the first batches of cross-border RMB loans after the promulgation of the Measures. Our brief comments on the main contents of the Measures are as follows:

  1. Pilot Areas

The "Nansha" and "Hengqin" as referred to in the Measures include the entire administrative areas of Guangzhou Nansha and Zhuhai Hengqin.

  1. Borrowers

Eligible Borrowers include enterprises which are incorporated in the Nansha or Hengqin areas and engage in actual operation or investment in such areas, as well as enterprises incorporated in Guangdong Province participating in the investment or construction of important projects in Nansha or Hengqin areas.

In contrast to the cross-border RMB loan policy of Qianhai, besides local Nansha and Hengqin enterprises, Eligible Borrowers also include enterprises that are incorporated in other areas of Guangdong Province and participate in important projects of Nansha or Hengqin. As the term "important projects" is not clearly defined, it leaves great latitude in interpreting and making use of this provision.

  1. Lenders

Eligible Lenders include banking financial institutions which are incorporated in Hong Kong Special Administrative Region ("Hong Kong") or Macao Special Administrative Region ("Macao") and carry out RMB business.

There are two differences compared to the cross-border RMB loan policy of Qianhai:

First, the term used in the Measures are banking financial institutions, not banks. Consequently, Eligible Lenders is not limited to banks. Taking Hong Kong as an example, it seems that the Measures should include licensed banks, restricted license banks, and deposit-taking companies regulated by the HKMA.

Second, Eligible Lenders also include banking financial institutions in Macao, which is a natural result considering that the pilot areas include Hengqin.

  1. Domestic Settlement Bank

In contrast to the cross-border RMB loan policy of Qianhai, domestic settlement banks are not limited to those banking financial institutions in Guangzhou or Zhuhai, but also include banking financial institutions in all of Guangdong Province. This may be due to the fact that the Eligible Borrowers may include enterprises in other areas of Guangdong Province.

  1. Loan Purpose

The loan shall be used for production and operation in Nansha or Hengqin, project construction in such areas, and overseas ("??") project construction. It shall not be used for investing in negotiable securities or financial derivatives, purchasing wealth management products or properties not for borrower's own use, or used to make entrusted loans to companies which are not in the same affiliated group as the borrower.

It remains to be seen whether the term "??" refers to areas outside Nansha and Hengqin or Mainland China. If it refers to the latter, then the areas in which the RMB loans can be used would be much smaller than those permitted under Qianhai's cross-border RMB loan policy.

Regarding the restriction on purchasing properties not for own use, given the actual practice of similar restriction in Qianhai, if the loan is used for real estate development in Nansha and Hengqin, it will probably not be prohibited in practice.

As for entrusted loans, the provisions imply that the proceeds of cross border RMB loans can be used to make entrusted loan to related companies. This is a huge breakthrough compared with the cross-border RMB loan policy of Qianhai.

  1. The Scale of Aggregate Loans

The People's Bank of China Guangzhou Branch will determine the scale of the aggregate amount of cross border RMB loans and institute control over the aggregate outstanding amount according to the development stages of Nansha and Hengqin, the development conditions of the RMB business of Hong Kong and Macao, and the requirements of domestic macro-control.

This is almost the same as that of the cross-border RMB loan policy in Qianhai.

  1. Filing for Record

Borrowers who intend to borrow cross-border RMB loans shall, through a domestic settlement bank, submit an application letter for the record filing; letter of intent for the loan; a copy of business license; a copy of organization code certificate; financial statements; and other material to the People's Bank of China Guangzhou Branch to file for a record of the loans. The domestic settlement bank shall, by virtue of the record filing notice issued by the People's Bank of China Guangzhou Branch, handle the opening, funds remittance, and other formalities for the borrowers.

This is almost the same as that of the cross-border RMB loan policy of Qianhai.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions