5. The macro-prudential policy parameters as mentioned in the above formulas shall be determined by PBC Shanghai, and may be adjusted in light of the need for nationwide credit control.

V. Cross-border Two-way RMB Capital Pooling in the PFTZ

1. Enterprises in the PFTZ may, in light of their operating and management needs, engage in cross-border two-way RMB capital pooling inside their own group. A group shall mean a multinational group of companies mainly linked by means of capital and composed of the parent company, subsidiaries, companies with capital participation and other members with investment relationships, including enterprises (and financial management companies) in the PFTZ. The cross-border two-way RMB capital pooling shall refer to the two-way capital pooling among the domestic- and overseas-based enterprises within the group. It shall be regarded as an operational financing activity within the group.

2. To engage in the cross-border two-way RMB capital pooling inside its own group, the headquarters of a group must designate a member enterprise (including a financial management company) registered, formed and actually engaged in business operation or investment in the PFTZ and select a bank in Shanghai to open a special RMB deposit account to be exclusively used for cross-border two-way RMB capital pooling inside the group. The said account may not be used for other funds. All parties inside and outside China that participate in the capital pool operations shall enter into agreements to specify their respective responsibilities and obligations for anti-money laundering, counter-terrorist financing and anti-tax evasion.

3. The flow of funds from parties whose cash is pooled to parties pooling the cash is considered as the “upstream flow”; while the flow of funds from parties pooling the cash to parties whose cash is pooled is considered as the “downstream flow”. The RMB funds in the upstream and downstream flows shall be the cash generated from production and operation, as well as industrial investment by enterprises. Cash flows generated by financing activities shall not be pooled for now.

VI. Centralized Payment and Receipt of Cross-border RMB under Current Account in the PFTZ

1. Based on operating and management needs, enterprises in the PFTZ may receive and make current account payments of cross-border RMB receipts and payments under current accounts,  on behalf of its domestic and foreign related parties on a centralized basis. Domestic and overseas related parties include member companies connected mainly by capital, and by investment-based relationships, as well as the non-group members that have supply-chain and close business relationships with the group.