Shanghai-based Lingang Group announced on Sunday the official launch of its cross-border capital pool business, which marked the first business of its kind ever since the Lingang Special Area was inaugurated in August last year.
The cross-border capital pool of Lingang Group, which is a major developer of the Lingang Special Area, will benefit the group and its 20 subsidiaries both at home and abroad. Up to $9.1billion worth of the group’s liabilities will be included into the newly founded capital pool. China Construction Bank will be responsible for the business.
According to an announcement released by the People’s Bank of China in February, cross-border capital pool business integrating both renminbi and foreign currency services should be explored in the Lingang Special Area – a newly included part of the China (Shanghai) Pilot Free Trade Zone. Under the new policy, multinational companies are allowed to allocate and adjust the reserve of renminbi and foreign currencies among their domestic and overseas subsidiaries.
As per the State Administration of Foreign Exchange Shanghai branch, the cross-border capital pool will help market entities to make better use of the domestic and overseas markets, reduce financing cost and use the capital more efficiently.
Although faced with the challenges posed by the COVID-19 epidemic, Lingang Special Area still managed to complete a total fixed asset investment of 7 billion yuan ($989 million) during the first quarter of 2020, up 20.5 percent from a year earlier.