Case Study #4 – Aerospace Manufacturer – Multinational
Having seen an increase in sales in aerospace products and parts, Company D switched to RMB invoicing in 2012 and manages its RMB exposure in the same manner as any other currency.
Now comfortable with the amount of liquidity in the offshore RMB market, Company D wants to improve on how it manages its intercompany loans between its central treasury and its subsidiary in China on a corporate basis to avoid taking out loans with a third party.
The aerospace product and parts manufacturing industry is important to Canada’s manufacturing sector, contributing $27.8 billion to Canada’s GDP and employing 172,000 people in Canada in 2013.
It is also a top 10 exporting industry to China, with nearly $500 million in exports to China in 2014.
Company D applied to SAFE for a quota.
Company D has put cross-border RMB pooling in place between its central treasury department and its subsidiary in China.
Financing costs have gone down.
It is easier to move money in and out of China – less paper work and reduction in manual processes.
It has created greater flexibility to make payments to suppliers in RMB, pay employees and make investments.
Open RMB bank account in Canada.
Access RMB liquidity and investment options.
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