Clifford Chance
China's new cross-border financing rules: potential impact on aircraft financing structures
17 May 2016
China, as a country with foreign exchange controls, closely monitors and administers its cross-border financings. On 29 April 2016, the People's Bank of China (PBoC) issued the Circular on Implementing Overall Macro-prudential Management System for Nationwide Cross-border Financing (the New Circular) which introduces a system (the MP System) to track financings provided to PRC on-shore entities by offshore financiers in RMB or foreign currencies.
The New Circular came into force on 3 May 2016 and the MP System now applies to all enterprises incorporated in China, including both foreign invested enterprises (FIEs) and Chinese domestic companies, but excluding real estate enterprises and government financing platforms (collectively, PRC Enterprises).
