Bank of China Expands Facilities to Accomodate Belt and Road Initiative
Currency facilities are now being offered to several companies that are taking part in the cross border renminbi business near the Xinjiang Uygur Autonomous region which are more favorable that in the China Shanghai Pilot Free Trade Zone. According to the deputy president Liu Xinwei the Ili Kazakh prefecture branch said lenders has intensified its efforts at promoting the development of the cross border renminbi business as the country is stepping up the efforts in the implementation of the Belt and Road Initiative.
Having a global network of 635 branches in 42 countries, the Bank of China is providing overseas financing services to companies that are registered in the China Kazakhstan Horgos International Border Cooperation Center in Horgos city. Overseas financing has helped this companies cut down their financiering costs by 2 percent. With one-year corporate lending rate at 6 percent in China compared to 3.5 to 4.5 percent abroad. These companies are allowed to use the money in their operations of their overseas subsidiaries.
The companies also make current account deposits or fixed term deposits with the overseas funds being raised or use the money to pledge financing. The People’s Bank of China and the central bank have set no ceiling on the amount of renminbi denominated overseas funds that can be raised by a registered company at the center. Since this will be more favorable to the central bank’s policy for the China Shanghai Pilot Free Trade Zone.
The five biggest State owned commercial banks are being operated in the center already assisted several companies raise 7 billion yuan in 2014. Last year foreign trade reached $27.67 billion in Xinjiang in which trade between China and its neighboring countries.