Van­cou­ver makes push for cur­rency trade cen­ter

China Daily (Canada) - - FRONT PAGE - By PAUL WELITZKIN in New York paulwelitzkin@ chi­nadai­lyusa.com

Seek­ing to cap­i­tal­ize on Van­cou­ver’s thriv­ing Asian com­mu­nity, Bri­tish Columbia Pre­mier Christy Clark sug­gested re­cently that the city would be an ideal set­ting to serve as the first North Amer­i­can off­shore clear­ing and set­tle­ment cen­ter for the Chi­nese ren­minibi.

“There will be a lot of ser­vice-sec­tor jobs that will come with this cen­ter. Plus the cen­ter will en­cour­age a lot of Chi­nese banks to es­tab­lish to head­quar­ters here and that will bring even more jobs,” Clark said on July 14 af­ter meet­ing with an Asian trade del­e­ga­tion.

“I think Van­cou­ver has a lot of ad­van­tages. We have a huge Asian com­mu­nity that in­cludes many who have Can­tonese and Man­darin lan­guage skills. Plus I think this would help es­tab­lish Van­cou­ver and Bri­tish Columbia as a gate­way for in­ter­na­tional and Asian fi­nance,” she added.

Clark said her of­fice is “ac­tively lob­by­ing” the Bank of Canada and the Peo­ple’s Bank of China — the two na­tions’ cen­tral banks — along with Ot­tawa and Bei­jing on the set­tle­ment cen­ter. She hopes that a de­ci­sion on the cen­ter from all of the par­ties will come within a year.

Van­cou­ver will face com­pe­ti­tion from Toronto, which also has a siz­able Asian pop­u­la­tion, to be­come a pri­mary trad­ing cen­ter for the RMB. Toronto is tout­ing its sta­tus as the fi­nan­cial cen­ter of Canada.

Mean­while, Van­cou­ver has im­ple­mented a pro­gram that ex­empts for­eign-ex­change trad­ing from provin­cial taxes. Last year, Bri­tish Columbia be­came the first for­eign govern­ment to is­sue an off­shore bond de­nom­i­nated in yuan. The is­suance of the one-year bond - nick­named the “dim sum” bond for the Chi­nese cui­sine that in­volves serv­ing a va­ri­ety of small del­i­ca­cies - raised 2.5 bil­lion yuan (C$433.8 mil­lion or $403.1 mil­lion).

th‘ I ink Van­cou­ver has a lot of ad­van­tages. We have a huge Asian com­mu­nity that in­cludes many who have Can­tonese and Man­darin lan­guage skills.” CHRISTY CLARK BRI­TISH COLUMBIA PRE­MIER

Hong Kong, Taipei, and Sin­ga­pore are al­ready cur­rency hubs while Lon­don and Frank­furt will soon join them af­ter agree­ments be­tween the cen­tral banks of China, Ger­many and the UK were an­nounced ear­lier this year. No city in North or South Amer­ica has de­vel­oped a ma­jor set­tle­ment cen­ter yet.

Ad­van­tages of be­com­ing a clear­ing and set­tle­ment cen­ter in­clude re­duc­ing cur­ren­cyex­change costs for Cana­dian com­pa­nies, which would be able to con­vert Cana­dian dol­lars di­rectly into RMB in­stead of hav­ing to pay fees to first con­vert the funds into US. dol­lars. The cur­rency hub is also ex­pected to gen­er­ate jobs and in­crease for­eign trade and in­vest­ment in the city that is se­lected.

China’s bid to make the ren­minibi a global cur­rency rep­re­sents another high-pro­file step in the coun­try’s fi­nan­cial­re­form plan. The yuan is now one of the world’s 10 most fre­quently traded cur­ren­cies, ac­cord­ing to the Bank of In­ter­na­tional Set­tle­ments.

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