China-Georgia Currency Swap Program

China-Georgia-Currency-Swap-Program.jpgChina and Georgia have recently signed a framework deal that covers the problem of currency swap. This agreement will not only strengthen the relations between the two countries but it will also help facilitate foreign investment in China coming from Georgia and vice versa. Our Chinese lawyers specialized in foreign investments can help you if you are a Georgian entrepreneur in China.

The currency swap program

Zhou Xiaochuan, the head of the People’s Bank of China and the Governor of the National Bank of Georgia, Giorgi Kadagidze, signed the document during the 34th Meeting of the Central Governor’s Club of Central Asia, Black Sea Region and Balkan Countries.
The currency swap program is important in terms of bilateral currency cooperation but its main importance lies in the aid it brings for trade in China and foreign investments in the country.
The two central bank governors also discussed other issues during their meeting, including the global and regional economic situations.

Advantages for foreign investors in China

A currency swap agreement allows for the exchange of the principal and interest rate in one currency for the equivalent amount in the other currency. This is considered a foreign exchange transaction, and unlike other business transactions it does not need to appear on the company’s balance sheet.
Companies can use currency swaps to take advantage of global markets. A company in China can use this new agreement to take out a loan in Georgian Lari and a Georgian company needs a loan in Chinese Yuan Renminbi. These two companies can agree upon a currency swap and take advantage of the better interest rates in the other country. A Chinese Yuan is currently worth approximately 0.38 Georgian Lari.
Georgia is a country that offers numerous opportunities for investments. Chinese investors in Georgia who are interested in opening a company here can contact our company registration experts in Georgia.
For detailed information about investing and Chinese laws, the experts at our law firm in China can help answer your questions.