Cash Management in China

by Hua Zhang, February 23, 2010
Industry Trends
Asia-Pacific

Abstract

Many Chinese companies are facing cash flow problems from the impact of the financial crisis. As such, it has become more and more crucial for companies to improve cash management and use funds efficiently.

In a new report, Cash Management in China: High Growth Market, Penetration of SMEs Still Low, Celent examines the rapidly developing cash management market China and trends in cash management services including liquidity management, cash pooling, investment services, and trade finance.

The cash management business has penetrated into 72% of bank deposits, but only 26% of corporate clients use cash management products, indicating a much higher penetration rate among large companies than among SMEs. In China, SMEs account for more than 60% of China’s GDP, and their annual growth rate has reached 46%. The overseas accounts receivable of SMEs have exceeded US$70 billion, and are growing by US$10 billion every year. These trends suggest that, in addition to the well-established demand from large corporates, there is a substantial and growing unmet need from SMEs for mature cash management services.

“Cash management in China is moving towards more integrated and globalized services, and increased application of information technology,” says Hua Zhang, analyst with Celent’s Asia Research Group and author of the report. “Chinese banks are developing more advanced and customized solutions to satisfy corporate needs, such as investment services and online cash management, and rolling these services out through branded campaigns with great fanfare.”

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

3

Market Size

5

Customer Segmentation

8

 

Cash Management at Large Enterprises

9

 

Cash Management at Small and Medium Enterprises

12

Cash Management Products in China

18

 

Payments

18

 

Investments

19

 

Liquidity Management

20

 

Cash Management Products of Chinese Banks

21

Regulatory Considerations

26

Trends in Chinese Cash Management

28

 

Recommendations

30

Leveraging Celent’s Expertise

32

 

Support for Financial Institutions

32

 

Support for Vendors

32

Related Celent Research

33

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