Testing resilience during a period of change
Economic volatility of the past year challenges CFOs and treasurers
20 Apr 2021 | The Asset

Like many sub-regions in the Asia-Pacific, North Asia was no stranger to the economic disruption caused by the Covid-19 pandemic. With work from home becoming the norm and corporate liquidity uncertainty prevalent, companies that were progressive in their treasury management approach performed better than most of their peers.

In South Korea, transaction bankers were quite surprised to see traditionally conversative companies rapidly rely on technology to carry out day-to-day business activities and confirm transactions via email. Moreover, clients that had once shunned electronic banking were now demanding demos from their service providers. It was a similar situation in neighbouring Japan, where companies were already preparing for work-from-home arrangements even prior to the emergence of Covid-19, in anticipation of the Tokyo Olympics.

In the sub-region’s largest market China, companies were not complacent in their treasury transformation activities despite the country being the first in, first out when it comes to tackling the pandemic. Over the review period, the board of editors at The Asset heard stories of China-based companies deploying technology such as robotics process automation (RPA) to allow for straight-through processing, and this has resulted in significant time and cost savings. Moreover, these companies continued to rely on their banking partners to reach out to financial regulators such as the State Administration of Foreign Exchange (SAFE) in the development of cross-border cash pools to provide vital liquidity to companies active in China.

While digitalization efforts of some treasury management professionals were affirmed during the pandemic, it was good fundamental treasury practices such as real-time visibility in finances and sound fund-raising strategies that enabled companies to ride out shocks from the market.

As businesses continued to progress smoothly for the most part of 2020, due to the country’s effective response to the health crisis, Chinese policy makers at the same time encouraged both banks and companies to find solutions to support their suppliers. In September 2020, Ant Group alongside several leading banks established Trusple, a blockchain-powered platform designed to help small and medium enterprises gain instant access to trade finance products from banks.

Amid the pandemic, China relentlessly pursued another of its policy goals, the development of the Chinese renminbi. Last year saw the pilot launch of the DC/EP (digital currency/electronic payment), also known as e-renminbi, in several Chinese cities such as Chengdu and Shenzhen.

While the fanfare around the world’s most advanced central bank digital currency has been notable, bankers familiar with the renminbi market described the e-RMB as just a tool to draw interest in the currency. The real value to the development of the renminbi is the continuing liberalization of the Chinese capital markets. Interest in the Chinese onshore market has remained robust throughout 2020 with international investors eager to deepen their involvement in Chinese assets. The move to include Chinese government bonds in the FTSE Russell’s World Government Index is further validation of the growing importance of the Chinese capital markets on the global stage.

Over the next few weeks, The Asset will be revealing the other winners of The Triple A Treasury, Trade, Sustainable Supply Chain and Risk Management Awards 2021. 

For the complete list of winners in North Asia, please click here.

For the full list of renminbi banks please click here.

To learn more about these awards, please click here.

For more information about receiving the awards, please contact events@theasset.com.

The virtual awards ceremony for The Asset Triple A Treasury, Trade, SSC and Risk Management Awards 2021 is scheduled to take place on June 17, 2021.