Payments in Chinese currency

The official name of the Chinese currency is the yuan or the renminbi. It is split into two markets which are expected to merge into one over time.

  • The ISO code CNY is used in the onshore market.
  • The ISO code CNH is used in the offshore market.  

 

Payments to China Facts CNH rules CNY rules Purpose Codes Payments to China

Payments to China

If your business makes payments denominated in yuan, they can be ordered in CNY and CNH.

Which ISO code should you choose?

  • The CNH can be used for all payment purposes.
  • The CNY is still not freely convertible and can only be used for specific purposes. Each purpose has a payment purpose code. The beneficiary must be a business with a CNY account held in China.

You can get help to find out which currency is most appropriate to use in your business under Rules for CNH payments and Rules for CNY payments.

These rules only apply to Danish businesses making CNH/CNY payments from accounts held with Nordea in Denmark.

Facts

Facts

China is in a development phase with a gradual opening of the local financial markets and currency, the so-called onshore market where the currency code CNY is applied. For example, previous restrictions on the yuan are in the process of being lifted to promote the use of the currency in global trade.

However, a hybrid market for payments in yuan, the offshore market, has also been created. It is called offshore because the market is located outside China. The currency code applied here is CNH.

The CNH is not subject to any restrictions – neither in terms of payment nor conversion. Offshore yuan is traded freely and used for yuan payments to and from businesses inside and outside of China.

When your business orders a transfer in CNH the conversion is automatically made at the current exchange rate. Nordea will send the payment via its correspondent bank in Hong Kong. If the transfer is for China, the amount is converted into CNY on a one to one basis, and the CNY amount is subsequently transferred to the beneficiary's bank in China.

While the CNH exchange rate is determined by supply and demand in international currency markets, the CNY exchange rate is primarily determined by the Chinese authorities.

If your business is to make a transfer in CNY, contact your contact person at Nordea Markets to obtain the exchange rate and an exchange rate reference. These must be entered in Corporate Netbank when the transfer is ordered for us to execute the payment.  

CNH rules

Rules for CNH Payments

  • Payments can be made to all countries, including China.
  • Payments can be executed irrespective of purpose.
  • However, in case of payments to China, the following applies:
  • The payment purpose code must be entered in the first line of Message to the beneficiary, see under Payment purpose codes.
  • Payments can only be made to businesses (payments to private individuals are not allowed).
  • The CNAPS code (a 12-digit bank code), if any, must be entered in the bank code field.
  • Transfers to all accounts are possible irrespective of the currency the account is held in (but transfers from CNY accounts are not possible). It is not necessary to contact Nordea Markets beforehand.

CNH account

  • To open a CNH account with Nordea in Denmark contact your relationship manager at Nordea.
  • Please note the following as the status of the account is a "settlement account":
    • Overdrafts are not allowed.
    • We recommend that the account balance is kept close to zero.
    • CNH accounts do not pay credit interest.
CNY rules

Rules for CNY payments

  • Only direct payments to China.
  • Only for approved transactions, including imports/exports as well as selected capital transactions approved in advance.
  • The payment purpose code must be entered in the first line of Message to the beneficiary. See under Payment purpose codes.
  • Payments can only be made to businesses (payments to private individuals are not allowed).
  • Only directly from CNY accounts. Other accounts (but not CNH accounts) may only be used if the exchange rate and exchange rate reference are entered in the payment. Contact your contact person at Nordea Markets to obtain this rate and reference.
  • The CNAPS code (a 12-digit bank code), if any, must be entered in the bank code field.

CNY account

  • A CNY account with Nordea in Denmark can only be opened according to agreement with Nordea Markets. Contact Global Emerging Markets Sales via your contact person at Markets.
  • Please note the following as the status of the account is a "settlement account":
  • Overdrafts are not allowed.
  • A credit balance is not allowed. That means that incoming CNY amounts must either be converted or sent back to China (for approved transactions) straight away.
  • The CNY account may only be used for CNY payments to and from China, excluding Hong Kong, Macau and Taiwan, or for conversions according to agreement with Nordea Markets.
  • CNY accounts do not pay credit interest.
Purpose Codes

Payment purpose codes

As the approved payment purpose codes are designated by Chinese banks, the text is in English.

When your business orders a transfer in yuan, the payment purpose code must be entered in the first line of the Message to the beneficiary field. The code must be written in the same way as in the form – that is, surrounded by slashes.

The Message to the beneficiary field should also contain additional information such as invoice number. This information is not required as such, but payments could be delayed if the information is missing.

See payment purpose codes.  (pdf, 17 KB)Åbner i nyt vindue