Hong Kong preferred base as Chinese SOEs consolidate overseas accounts in treasury hubs

China's state-owned enterprises (SOEs) are streamlining their overseas financial holdings by consolidating them into centralized treasury hubs, with Hong Kong becoming the favored location amidst a crackdown on state funds moving abroad. Due to extensive expansion over the years, numerous SOEs had amassed assets in various countries, causing liquidity and risk management to become disorganized and challenging for both regulators and headquarters to oversee.

According to the State-owned Assets Supervision and Administration Commission (Sasac), central SOEs currently manage around 8 trillion yuan (approximately US$1.1 trillion) in overseas assets spread across over 180 nations and more than 10,000 projects and entities. Since 2022, Chinese authorities have instructed central SOEs to establish treasury systems that provide comprehensive visibility and precise control, an order that has since been extended to their overseas divisions.

Analysts explained that managing multiple independent overseas businesses resulted in duplicated investments, scattered assets, and inefficient resource allocation. By adopting a unified approach, SOEs sought to optimize assets, enhance returns, and manage geopolitical and operational risks more effectively. Hong Kong has gained prominence as the preferred hub, owing to its robust banking system, advanced capital markets, offshore yuan reserves, and strong ties with the mainland.

China Unicom, a telecommunications firm, introduced an enhanced overseas treasury system in late 2024. By late 2025, the subsidiary managed over 7 billion yuan in offshore funds from 30 different currencies, while reducing payment processing times from 30 minutes to a mere 30 seconds. State-owned China Railway Rolling Stock Corporation established a dedicated treasury center in Hong Kong in April 2024, achieving a 95% visibility over its global bank accounts.

State Power Investment Corp, which set up its Hong Kong treasury branch in 2017, managed assets worth 50.88 billion yuan by the end of last year. State Energy Group and China Mobile have also established treasury centers in Hong Kong. These developments align with stricter regulatory scrutiny. In January, Sasac implemented a "look-through" supervisory regime focusing on overseas acquisitions and project financing.

In April, the commission established a new bureau dedicated to overseeing overseas state assets. Look-through supervision aims to identify underlying assets, risks, and beneficiaries by examining layers of ownership, investment vehicles, or contractual arrangements. Hong Kong is capitalizing on these opportunities by positioning itself as a global treasury management center.

In June, the special administrative region's government unveiled an action plan to attract multinational corporate treasury centers, including tax incentives, treaty expansion, talent development, and industry promotion. Hong Kong's secretary for financial services and the treasury, Christopher Hui Ching-yu, stated at a forum in June that the city aims to enhance its role as a platform for companies bringing in and going global, encouraging firms to centralize fund management, asset allocation, and risk control in Hong Kong.