THE DILEMMA OF CASH MANAGEMENT IN CHINA. Este artículo no está disponible.THE DILEMMA OF CASH MANAGEMENT IN CHINA

During the past few years China has attracted investment by foreign multinationalcompanies. With its entry into the World Trade Organization on 11 December2001, China promised to further open up its market to foreign goodsand services, and to welcome foreign investment in the following five years inpreviously restricted sectors such as banking and financial services. However,China’s cash management environment still provides many impositions andobstacles to challenge corporate treasurers. Moreover, unwritten localcustoms and practices, coupled with the lack of written regulations, do notease situation.Hence, this paper introduces the reader to the complex requirements, impositionsand obstacles of cash management in China. In this paper the authorfocuses on two cash management instruments, netting and cash pooling,and presents the associated dilemmas. Furthermore, the author highlights entrustedloans as an alternative solution. In the course of the paper it becomesclear that implementing cash management instruments requires testing theboundaries of regulation and technology.The paper addresses financial managers and treasurers, economists as well asentrepreneurs.

During the past few years China has attracted investment by foreign multinational companies. With its entry into the World Trade Organization on 11 December 2001, China promised to further open up its market to foreign goods and services, and to welcome foreign investment in the following five years in previously restricted sectors such as banking and financial services. However, China's cash management environment still provides many impositions and obstacles to challenge corporate treasurers. Moreover, unwritten local customs and practices, coupled with the lack of written regulations, do not ease situation. Hence, this paper introduces the reader to the complex requirements, impositions and obstacles of cash management in China. In this paper the author focuses on two cash management instruments, netting and cash pooling, and presents the associated dilemmas. Furthermore, the author highlights entrusted loans as an alternative solution. In the course of the paper it becomes clear that implementing cash management instruments requires testing the boundaries of regulation and technology. The paper addresses financial managers and treasurers, economists as well as entrepreneurs.