China payments prove confusing for companies
MOST multinational companies are ill-equipped to handle the rapid rise in renminbi transactions, according to new research published today.
Ninety per cent of senior executives surveyed by international legal practice Allen & Overy said their company’s exposure to Chinese currency is either “important” or “very important”.
However, more than three-quarters of those polled also said they thought a lack of understanding about how to conduct renminbi transactions is the greatest obstacle to their company’s use of the Chinese currency.
Renminbi payments have soared in recent years, with global growth set at 102 per cent last year alone. Almost two-thirds of the executives polled by Allen & Overy said they expected transaction volumes to more than double in the next five years.
Jane Jiang, China regulatory partner at Allen & Overy, said companies need to understand the currency’s changing regulatory framework if they are to keep up with increased demand for transactions.
“China’s [renminbi] regime is likely to be a source of new possibilities for those companies who not only keep abreast of the changes and adjust their own policies in response, but also dare to ask for changes by proactively communicating with more listening regulators,” Jiang said.