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Cross-border loan pilots Taiwanese share financing facilities

Time: 2015-11-30         Source: Economic Daily         Author: Wen Jicong

"Cross-border Lending" is a trial of Kunshan and Taiwan's cross-border RMB loan business (hereinafter referred to as "cross-border loan"). It was approved by the People's Bank of China in July this year, allowing Taiwan-funded enterprises in the Kunshan Experimental Zone to operate from Taiwan. The banking institutions of the Renminbi business borrowed RMB funds.

“Currently, Kunshan, Jiangsu Province has become one of the most active areas for investment by Taiwanese companies in Taiwan, the most concentrated areas for Taiwan-funded enterprises and cross-strait economic and cultural exchanges. As of the end of September this year, Kunshan has approved 4,574 Taiwan-funded enterprises with a total investment of 559.5. Billion U.S. dollars; Kunshan attracts Taiwanese investment to about 1/4 of Jiangsu Province and 1/9 of the nation respectively.” said Chen Jun, the branch of the People’s Bank of China’s Kunshan City Branch. At present, Taiwan’s enterprises in Kunshan Experimental Area have a strong demand for funds, but It does not belong to the group's small and medium-sized Taiwanese companies, "rootless" Taiwanese companies, and listed counter companies. It also cannot fully utilize the Group's two-way loan policy to obtain cross-border, low-cost renminbi funds. Therefore, it is particularly necessary to develop "cross-border loans."

In Chen Jun’s opinion, the development of “cross-border loan” business pilots can, on the one hand, further demonstrate the leading role of the financial innovation business in the Kunshan pilot area, meet the needs of Taiwanese-funded enterprises in production and operation of financing in the district, and promote the full availability of Taiwanese enterprises in the region. Utilizing “two markets and two resources” to speed up industrial development and economic transformation; on the other hand, it is also conducive to promoting the cross-border flow of RMB funds between Kuntai and Taiwan, and injecting new vitality into the deepening of Kuntai’s economic and trade exchanges. Since the launch of the pilot business, a total of 30 Taiwan-funded enterprises have signed cooperation agreements with local banks, with an intention of 370 million yuan. Up to now, the "cross-border loan" business pilot has accumulatively registered 80 million yuan in contract registration and 61.94 million yuan in withdrawal registration.

“In the past, Taiwan companies couldBank loanIt can also borrow foreign debts to borrow funds from related overseas banks; ‘cross-border loans’ broaden the financing channels for Taiwan-funded companies in Kunshan, and the financing costs have been reduced, especially for many small and medium-sized Taiwanese companies. "Chen Shiqin, the financial manager of Taiwan Enterprise Association Easy Technology Precision Machinery Co., Ltd. said.

Through the "cross-border loan" business pilot, many companies have obtained tangible benefits. Dingying Electronics (Kunshan) Co., Ltd. is a Taiwan-funded enterprise established by the wholly-owned investment of Taiwan-listed company, Yingying Electronics Co., Ltd. The company is the first company to conduct cross-border loan business trials in the Kunshan Pilot Zone. The first loan borrowed from the Yushan Bank in Taiwan was 6 million yuan, and the interest rate was lower by an average of about 1% than the domestic bank.

“Finance-based companies' financing channels in the mainland region are based on operating results and Chinese-funded or foreign-funded banks on the Chinese mainland to obtain RMB or foreign currency financing. Second, they rely on the difference in total external debt investment and registered capital to obtain foreign-currency financing.” For example, Zhang Qin, deputy manager of the financial department of Ying Electronics (Kunshan), assumes that the company invested a total of 220 million U.S. dollars in Kunshan with a registered capital of 80 million U.S. dollars and an intermediate difference of 140 million U.S. dollars. Overseas parent companies can obtain financing from foreign countries and remit in. .

Zhang Qin introduced that its parent company is a listed company in Taiwan. If it is through a group loan, it will be subject to the approval of the board of directors and the general meeting of shareholders in accordance with the relevant laws of Taiwan and the regulations governing the management of listed companies and belongs to the “funded loan” of the related company. The procedures are relatively cumbersome. Through the "cross-border loan" pilot, the company can directly loan to Taiwanese-funded banks. From the time of signing a contract to a loan for about a week or more, it can now be solved in one day.

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