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Revision with unchanged content. During the past few years China has attracted investment by foreign mul ti na tional companies. With its entry into the World Trade Organization on 11 De cem ber 2001, China promised to further open up its market to foreign goods and services, and to welcome foreign investment in the following five years in pre viously restricted sectors such as banking and financial services. However, China s cash management environment still provides many impositions and ob stacles to challenge corporate treasurers. Moreover, unwritten local customs and practices, coupled with the lack of written regulations, do not ease situation. Hence, this paper introduces the reader to the complex requirements, im po si tions and obstacles of cash management in China. In this paper the author focuses on two cash management instruments, netting and cash pooling, and presents the associated dilemmas. Furthermore, the author highlights en trusted loans as an alternative solution. In the course of the paper it becomes clear that implementing cash management instruments requires testing the boundaries of regulation and technology. The paper addresses financial managers and treasurers, economists as well as en trepreneurs.

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Master of Arts University of Zurich(major in Finance). Former Associate of Central Settlement, International Payment Services at Würth Finance International B.V., Kuesnacht/Zurich. Current Associate Hedge Fund Investment Solutions at LGT Capital Partners Ltd., Pfaeffikon, Switzerland.

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