“Chinese banks should ensure that foreign investors can freely remit yuan-denominated returns from profits and stock dividends,” the People’s Bank of China (PBOC) ordered in early January.
The instruction has been warmly received by overseas corporates, who are now able to shrug off a few regulatory shackles that had, until now, constrained their financial management in the territory. Similarly, Chinese companies have been allowed to transfer back to their homeland funds raised abroad.
According to the PBOC, those measures – among others – are designed to “improve policies for cross-border renminbi services, create an excellent business environment and service One Belt, One Road construction”.
Buoyant trade and investment – plus the effects of recent US tax reforms – will drive up global growth by 3.9% over this year and 2019, according to the International Monetary Fund (IMF). Unveiled at the World Economic Forum’s recent Annual Meeting at Davos, the growth figure is 0.2% higher than a previous forecast that the IMF issued for the same period in the autumn of last year.
The organisation cited “a pickup in investment, particularly among advanced economies, and increased manufacturing output in Asia” as the driving forces behind its revision. It also noted that “growth surprises were particularly pronounced in Europe and Asia”.
Global, double-digit growth in electronic payments activity over 2017 spurred record traffic for SWIFT’s FIN service, yielding 7.1 billion messages. In its peak day of 30 November, FIN – a service that allows the transfer of structured financial information – racked up some 32.84 million messages – 8% higher than the previous year’s peak.
SWIFT CEO Gottfried Leibbrandt said: “Traffic growth, and payments traffic growth in particular, was exceptionally strong in 2017, reflecting [our] community’s trust in the cooperative, and the wider growth in the global economy.”
He added: “SWIFT maintained the high security and reliability performance our community expects, while investing for the future [and] developing innovative new services.”
In a similar development, the UK’s BACS service has reported that it processed a record 6.34bn payments over 2017, with a combined value of more than £4.9 trillion. Throughout the year, direct-debit volumes processed through the service surged by 3.8% to more than 4.2bn, accounting for £1.3 trillion.
Indeed, 155 million more payments were made in that form in 2017 than in the previous year. BACS CEO Michael Chambers said that the service’s “continued and impressive growth” has shown just how “important” its products are to consumers and firms throughout the UK.”
Meanwhile, the UK’s New Payment System Operator (NPSO) held an event for 200 members of its participant community in mid-January, where the workings of its advisory councils were outlined and stakeholders exchanged ideas.
While UK MPs have approved the so-called ‘Brexit bill’ that will copy and paste many EU laws onto Westminster’s statute books, the City of London’s passage through the divorce process has been rather less smooth.
In an EU27 meeting of late January, countries agreed that the City would not have access to a free-trade deal with the EU in the wake of the split, with a continental diplomat telling the Financial Times: “There was a strong [European] Commission message [in the discussions] that there would be no special deal.”
Adding to the UK economy’s Brexit concerns, the FT also reports that the EU is threatening Westminster with sanctions, should the UK government attempt a regulatory bonfire designed to help its private sector undercut those of the remaining 27 countries.
The European Commission has convened a new unit to keep watch and report upon key trends in the blockchain arena. Announced on 1 February, the EU Blockchain Observatory and Forum will also promote European entities who are working on projects with links to the fast-growing software, and will reinforce Europe’s engagement with multiple stakeholders in the field.
Commission vice-president for Financial Stability and Capital Markets Union Valdis Dombrovskis said: “Among the many technologies that are driving digital innovation, blockchain has the potential to be truly transformative for financial services and markets. The Blockchain Observatory and Forum will monitor developments and also inform our policymaking.”