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Booking Center Switzerland
November 2011
New horizons in trading with China
Renminbi offering for corporate clients
With its opening up, China is becoming a global
economic power at an ever-faster rate. A glance
at the list 1 of Switzerland’s most important
trading partners shows that it held eighth place
in 2010, while outside Europe it even ranked
second.
Having continually smoothed the way through
gradual trade concessions, the People’s Republic of
China is attracting increasing numbers of Swiss
companies that wish to start doing business there or
expand their existing activities.
New horizons for Swiss companies
The enactment of "RMB Trade Settlement" (RTS)
opens up new horizons for Swiss companies wishing
to invest in China. Since mid-2010, Chinese imports
and exports can be paid for in Renminbi, crossborder, in all countries of the world. In August this
year, RTS was extended to all provinces on the
Chinese mainland.
This marks a further reduction in trade barriers
(imports and exports) in dealing with Chinese
companies in Renminbi. The development is part of
the Chinese government’s latest five-year plan, which
aims at internationalizing the national currency.
The move releases companies from their dependency
on the US dollar as the international means of
payment in trading with China. As a result, Swiss
companies that settle their business in Renminbi can
also maintain business relationships with Chinese
companies that only have limited access to foreign
currency.
UBS as partner
With UBS at your side, your company can now start
benefiting from the internationalization of the
Chinese currency. Until July 2009, the Renminbi was
in circulation only in the People’s Republic. You are
invited to take this opportunity to further expand
your business activities in China. As an internationally
active bank, UBS will support you in opening
Renminbi accounts in Switzerland.
Good to know!
What is the difference between RMB, CNY and CNH?
RMB is the abbreviation used for Renminbi ("people’s currency"). In China, it generally refers to the (physical)
currency.
CNY is the official ISO code* for the Chinese currency and the market name for the onshore Renminbi. It is also
the abbreviation used for the Chinese yuan on cash markets within the country (only deliverable on the
mainland).
CNH is the technical market name for the tradable and deliverable offshore Renminbi, which is used outside
mainland China.
* Reason why your account with UBS AG in Switzerland is in CNY
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Source: Federal Office for Statistics
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Make the most of the opportunities!
Chinese companies are starting to use the arising
opportunities to transact their business in RMB and
pass on currency risks to their foreign business
partners. In return, companies from Switzerland gain
dramatically through access to the Renminbi, as they
can now settle their import and export business in
the currency, and conclude fixed-price agreements
with Chinese companies with far greater ease.
Accepting currency risks may open up potential price
advantages, while simultaneously fixing the exchange
rate with UBS. Our specialists will be happy to inform
you as to how your company can hedge against
currency risks.
All in all, the internationalization of the Renminbi
ensures that Swiss companies will be able to
strengthen their market position in China and
increase their scope of action significantly. See the
“Your benefits” box for more opportunities for your
company.
Client eligibility conditions for a Renminbi
account
 Corporate clients must do business as an
operating company or
 as a non-operating company that was not
incorporated to circumvent restrictions applicable
to private clients resident in Hong Kong.
 No restrictions apply to either legal form or size.
Our services
 Payment services
- Account opening for domestic and foreign
corporate clients (official ISO code: CNY)
- Payments in Renminbi outside mainland China
- Payments in Renminbi from and into mainland
China, provided the client has a genuine
business need*
- Option to use all payment channels (e.g. UBS
e-banking, UBS Pay, KeyDirect, KeyLink) to
release payments
- Acceptance deadline time 1600 V-2 for
payments
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Trade Finance
- Import and export letters of credit,
documentary collections and bank
guarantees*
Foreign Exchange
- FX spot, forward and swap transactions*
Money Market
- Fixed term deposits*
- Fiduciary fixed term deposits with UBS Jersey*
Comprehensive client/account reporting
* Subject to availability and approval. UBS reserves
the right to limit quantities.
Functionality of Renminbi payment services
Your payment to China will be debited to your
Renminbi account in Switzerland and sent to the
beneficiary through our Hong Kong branch. Prior to
crediting, conversion from the offshore currency
(CNH) to the onshore currency (CNY) is performed in
the local clearing system (CHATS) at a 1:1 rate. The
credit to the beneficiary account is then done in the
onshore currency (CNY).
The same clearing process applies to payments from
mainland China to Switzerland. No fees accrue from
the clearing system’s conversion in either direction.
Genuine business need
As restrictions apply to Renminbi payments into
mainland China, UBS evaluates, during the
Renminbi account opening process, if the client has
a genuine business need that justifies payments
into mainland China.
A genuine business need exists, for example, if the
client has a subsidiary or trade partner in China.
Ultimately, it is the client’s responsibility to ensure
that transactions into mainland China comply with
the appropriate pre-conditions.
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Your benefits
 You can manage your own foreign exchange requirements. In addition to reduced administrative effort, this
strengthens your discount bargaining position. Our tip: always request two quotes from your supplier, one
in Renminbi and the other in the usual currency.
 The frequent contract re-negotiations that Chinese companies often justify with exchange rate fluctuations
fall away.
 You can further expand your business activities in the Middle Kingdom and strengthen your market position
by settling payments in CNY. If you are simultaneously an importer and an exporter, your currency risk is
reduced.
 UBS is one of the world’s largest foreign exchange dealers; you profit from our expertise and excellent
service.
Key restrictions
The following services can currently not be offered by
UBS in Switzerland:
 Cash deposits/withdrawals of Renminbi
banknotes
 Renminbi cheque services
Renminbi – the risks
Renminbi is an emerging market currency with an
increased currency risk (e.g. varying availability).
Convertibility of and trading in this currency are
regulated by the Central Bank of China and may be
amended to your disadvantage at any time.
Conversions, remittances or transfers may thus be
restricted for regulatory reasons.
Have we aroused your interest?
Please contact your UBS client advisor for further
information. He can provide you with further
information and prices about the UBS Renminbi
offering and support you with the opening of a
Renminbi account in Switzerland.
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The material contained herein is exclusively for information and advertising purposes. It constitutes neither investment research nor a sales prospectus, nor is it a call
to make any sort of financial investment. Note that UBS reserves the right to change its service and product offering and prices at any time without prior notice and
that information may change. We above all draw your notice to the fact that the Renminbi is not currently freely convertible and that its convertibility and transfers
in the currency may be subject to regulatory restrictions. These restrictions also apply to Renminbi accounts at UBS. Consider that all investments are connected with
a certain risk and that the Renminbi exchange rate may vary against other currencies, leading to gains or losses for the client, or influencing the return of an
associated product. Your attention has thus been drawn to these risks (which could be substantial). Legal requirements apply to certain services and products. As a
result, these products and services cannot be offered without restriction in every country. UBS provides no legal or tax advice services, nor can it provide either
general nor specific explanations for clients in respect of their conditions and needs with regard to the treatment of investments or returns on them for taxation
purposes. Depending on their needs, clients should obtain independent legal and tax advice regarding the suitability of products, investments or instruments. At any
time UBS AG and other companies in the UBS group (or employees thereof) may have a long or short position, or deal as principal or agent, in relevant securities or
provide advisory or other services to the issuer of relevant securities or to a company connected with an issuer. This publication may not be sent to any persons
resident in the US and/or US persons or to regimes in which we restrict such marketing. UBS expressly prohibits the forwarding of this material, either in whole or in
part, without its written approval. UBS accepts no liability for the actions of third parties in this regard. Unless stated to the contrary, the source of all information is
UBS. Should you have any questions, please contact your client advisor.
© UBS 2011. The key symbol and UBS are registered and unregistered trademarks of UBS. All rights reserved.
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