Shanghai has tried to lure headquarters of foreign multinationals for decades, but a recent policy change might just help the city to do this just a bit more effective, explains Shanghai-based lawyer Mark Schaub in IFLR.
Mark Schaub, Shanghai-based partner at King & Wood Mallesons, said that a larger change seems more subtle: the rules introduce more flexibility in approving MNC headquarters. “The authorities have been given leeway to approve provided requirements have been basically fulfilled. This will make it much easier in practice,” he said.
The most interesting provisions, however, relate to cross-border use of the yuan, although details have not yet been released. Those most interested in these new rules will be those with huge volumes of trade, such as mining and procurement companies.
Schaub added, “However, the regulations are unclear because the MNC’s headquarters in China will be a Chinese company. Instead, it may mean the parent company will have further access to RMB convertibility.” He predicted that MNCs with regional headquarters in Shanghai will be able to utilize RMB for cross-border use, perhaps in pilot programmes for companies that have shown a commitment to investing in China.
Mark Schaub is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers’ request form.
On Thursday November 1 the China Weekly Hangout will focus on eight years of harmonious society under Hu Jintao and what we can expect the next eight years under Xi Jinping. Including Janet Carmosky who will report on the findings during the National Committee on US-China Relations China Town Hall on Monday. The CWH is held on 10pm Beijing time, 3pm CET (Europe) and 10pm EST (US). More on the logistics of the hangout later this week at the China Herald or our event page at Google+.
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