Overseas Lending: A New Era of Integrated RMB and Foreign Currency Operation

As China deepens its "going global" strategy and companies expand their global industrial footprint, financing needs of domestic companies and their overseas affiliates have grown rapidly. Overseas lending, a flexible instrument for managing cross-border capital flows, has become both a financial channel supporting Chinese companies' global operations and a key policy tool for advancing high-standard opening-up and improving the efficiency of cross-border capital allocation via institutional innovation. On March 20, 2026, the People's Bank of China (PBOC) and the State Administration of Foreign Exchange (SAFE) jointly issued the Administrative Measures for Overseas Lending by Domestic Enterprises (Yinfa [2026] No. 63) (hereinafter referred to as Document No. 63), which took effect on April 20 and replaced the earlier overseas lending rules. The new framework marks a shift toward integrated management of domestic and foreign currencies, comprehensive macro-prudential oversight, and end-to-end risk controls for overseas lending.

Evolution of China's Overseas Lending Policies: From Pilot Exploration to a Unified Management Framework

China's overseas lending policies have evolved in tandem with the country's reform and opening-up process, the global expansion of Chinese companies, and broader improvements in cross-border capital management. Its development can broadly be divided into four phases: pilot exploration, dual-track development, macro-prudential transition, and integrated consolidation.

Pilot Exploration Phase (Before 2009): Limited Access Under Tight Controls

In the early years of reform and opening-up, China maintained strict controls over cross-border capital flows, and overseas lending by domestic companies remained heavily restricted. Only a small number of designated companies were permitted to extend overseas loans through special approvals, primarily to support state-backed foreign aid and key overseas projects, rather than commercial expansion. After 2000, as China's "going global" strategy took initial shape, pilot programs for small-scale overseas lending emerged in regions with concentrated outbound investment. However, the absence of a unified nationwide management framework, lengthy approval procedures, strict quota controls, and limited transaction volumes meant overseas lending remained fragmented and far from institutionalized.

Dual-Track Development Phase (2009–2015): Foreign Currency First

China's overseas investment surged after the 2008 global financial crisis, exposing financing constraints faced by overseas subsidiaries of Chinese enterprises. In response, SAFE issued the Circular on Issues Concerning Foreign Exchange Administration of Overseas Lending Granted by Domestic Enterprises (Huifa [2009] No. 24) in 2009, establishing the country's first nationwide management regime for foreign-currency overseas lending and standardizing the business operation framework. Under the framework, qualified borrowers were limited to wholly owned overseas subsidiaries and investee companies of domestic lenders. Lending quotas were capped at 30% of the lender's equity, while funding sources were restricted to proprietary foreign exchange holdings, RMB converted into foreign currency, and foreign-currency liquidity pool funds approved by SAFE. Transactions were subject to case-by-case registration and approval.

At the time, RMB-denominated overseas lending lacked an independent regulatory framework and was mostly governed by foreign-currency rules. This created discrepancies in funding sources, loan maturities, and interest rate regulation, thereby forming a dual-track system governing RMB and foreign-currency overseas lending.

Macro-prudential Transition Phase (2016–2025): The RMB Framework Takes Shape

As RMB internationalization gained momentum and cross-border RMB business flourished, the PBOC issued the Notice of the People's Bank of China on Further Clarifying Matters Concerning the Renminbi Overseas Lending Business of Domestic Enterprises (Yinfa [2016] No. 306) in 2016, formally creating a standalone framework for RMB-denominated overseas lending. A key policy change was the introduction of a macro-prudential management framework, including an initial macro-prudential adjustment parameter of 0.3. Under this formula, the ceiling for outstanding RMB overseas lending balances was set at owners' equity multiplied by 0.3. The shift to balance-based quota management significantly improved operational flexibility.

In January 2021, the PBOC and SAFE jointly issued the Notice on Adjusting the Macro-prudential Adjustment Parameter for Cross-border Financing of Companies, raising the macro-prudential adjustment parameter from 0.3 to 0.5. This move expanded overseas lending capacity by over 66%, helping meet rising funding needs of enterprises expanding overseas.

Policy Integration Phase (2026–Present): Unified Rules and a Redesigned Framework

Before Document No. 63, RMB and foreign-currency overseas lending operated under separate policy frameworks, with inconsistent requirements for quota calculations, validity periods, funding sources, interest rates, loan maturities, and rollover arrangements. Harmonizing the two systems had become increasingly necessary. Moreover, the RMB had become the dominant settlement currency for overseas lending, reinforcing the case for streamlining RMB-denominated lending, expanding the currency's cross-border application, and supporting China's broader RMB internationalization strategy. Against that backdrop, the PBOC and SAFE jointly introduced Document No. 63 on March 20, 2026, establishing unified rules, quotas, and procedures for overseas lending across domestic and foreign currencies while repealing previous regulations. The new regime emphasizes a balance between development and security, alongside coordinated macro-prudential and micro-level oversight of RMB and foreign-currency lending. It terminated the dual-track system and ushered in an integrated overseas lending framework.

By harmonizing elements of earlier RMB and foreign-currency overseas lending policies, Document No. 63 aligns macroeconomic management objectives with companies' financing needs and provides more consistent support for firms expanding overseas. At the same time, regulators adopted a "macro-prudential management plus micro-level supervision" approach aimed at enhancing macro controls, refining micro-level regulatory measures, curbing procyclical lending behavior, and guarding against risks arising from abnormal cross-border capital flows.

Five Key Changes in Document No. 63: Toward a Full-Cycle Overseas Lending Regime

Document No. 63 comprises six chapters and 35 articles governing the full overseas lending process, including registration, proceeds utilization, supervision, and legal liabilities. Compared with previous rules, the framework introduces five key changes.

Unified Rules for RMB and Foreign-Currency Overseas Lending

Guided by the principle of "same business, same rules", Document No. 63 harmonizes regulatory requirements for RMB and foreign-currency overseas lending. Registration is now handled uniformly by the local branch of the SAFE where the lender is registered, eliminating the need for companies to navigate separate regulatory frameworks while enabling banks to follow a single operational standard. The harmonized framework spans the full lending process, including eligibility requirements, registration procedures, quota calculations, funding sources, restrictions on the use of proceeds, maturity management, interest rate rules, operational requirements, and penalties for violations.

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