Canada urged to mo­bi­lize RMB hub

China Daily (Canada) - - FRONT PAGE - By HATTY LIU and MAYA LIU in Van­cou­ver For China Daily

Cana­dian fi­nan­cial in­sti­tu­tions and busi­nesses were urged to take ad­van­tage of ren­minbi (RMB) glob­al­iza­tion at Canada’s inau­gu­ral RMB event, held in Van­cou­ver.

The Pa­cific Fi­nance and Trade Sum­mit, co-hosted by the Province of BC and Ad­van­tageBC, brought to­gether gov­ern­ment of­fi­cials, fi­nan­cial in­dus­try lead­ers and bank­ing rep­re­sen­ta­tives from China and Canada to ed­u­cate Cana­dian stake­hold­ers on eco­nomic and trade op­por­tu­ni­ties pro­vided by Canada’s role as a set­tle­ment hub for the RMB on June 16.

Key speak­ers in­cluded Liu Fei, con­sul gen­eral of China in Van­cou­ver; BC Min­is­ter of Fi­nance Michael de Jong; and Teresa Wat, BC min­is­ter for in­ter­na­tional trade, Asia Pa­cific strat­egy and mul­ti­cul­tur­al­ism.

The over­view pre­sen­ta­tion by Peter Hall, chief economist of Ex­port De­vel­op­ment Canada, and lun­cheon ad­dress by Ron­grong Huo, head of China and RMB busi­ness de­vel­op­ment for HSBC, both high­lighted changes that are oc­cur­ring in the uses of global cur­rency and in RMB busi­ness, which Cana­dian busi­nesses can cap­i­tal­ize on.

The sum­mit also in­cluded four panel dis­cus­sions held by fi­nan­cial and bank­ing rep­re­sen­ta­tives cov­er­ing Cana­dian banks’ role in global fi­nance, Chi­nese banks’ role and set­tle­ment hubs, Cana­dian cities’ sta­tus as the world’s top fi­nan­cial cen­tres and how Cana­dian busi­nesses can use the RMB set­tle­ment ser­vices.

Rep­re­sen­ta­tives from top Chi­nese fi­nan­cial in­sti­tu­tions had the chance to speak di­rectly with Cana­dian busi­ness lead­ers, shar­ing their views on how to bet­ter work with each other and tap into new mar­kets.

The need for Canada to di­ver­sify and more ac­tively pro­mote its RMB ser­vices to busi­nesses across the Amer­i­cas, tak­ing ad­van­tage of the RMB’s cur­rent rapid glob­al­iza­tion, was the theme of the sum­mit.

In the key­note speech, de Jong stressed that the RMB hub is “a lim­ited time com­pet­i­tive ad­van­tage that won’t last for­ever, but it is a unique op­por­tu­nity if we choose to take ad­van­tage.”

“It’s the mo­ment in time when Canada gets to de­cide to strengthen our re­la­tion­ship with this grow­ing econ­omy that’s re-es­tab­lish­ing it­self as an eco­nomic pow­er­house,” de Jong said.

The RMB has be­come the world’s fifth most used cur­rency for trade as of March 2015, and is the sec­ond-most used cur­rency in in­ter­na­tional trade fi­nance. In a speech, Wang Wei, ex­ec­u­tive vi­cepres­i­dent of the Agri­cul­tural Bank of China, pointed out that the vol­ume of ren­minbi pay­ments in Canada had in­creased more than 200 per­cent over the past two years.

China is mov­ing to­ward mak­ing the RMB fully con­vert­ible and has re­quested the In­ter­na­tional Mon­e­tary Foun­da­tion to rec­om­mend it as a global re­serve cur­rency by as early as fall, 2015. To date, the Chi­nese cen­tral bank has signed cur­rency swap agree­ments with 31 cen­tral banks and mon­e­tary author­i­ties around the world.

“Ren­minbi in­fra­struc­ture is be­ing built very rapidly across Asia, Europe and now the Amer­i­cas and the most ob­vi­ous pieces to this process are the ren­minbi hubs,” Hall said, stress­ing that the global rise of the sta­tus of the RMB is “not a ques­tion of if, but when.”

But as other coun­tries are also tak­ing ad­van­tage of the favourable back­drop for RMB busi­ness, Hall be­lieves that Canada can­not take its po­si­tion for granted.

“Canada’s RMB hub is the first in the Amer­i­cas but not the first in the world,” Hall said. “Cana­dian com­pa­nies will need to keep pace if they want to pro­tect their mar­ket share in­side of China.”

An RMB set­tle­ment hub can re­duce cur­rency ex­change costs, re­duce trans­ac­tion risk, and al­low faster and more di­rect pay­ments for Cana­dian busi­nesses trad­ing with Asia, which could make Chi­nese small- and medium-sized busi­nesses favour do­ing busi­ness with Cana­dian part­ners.

The abil­ity to di­rectly trade in RMB is also ex­pected to add as much as $32 bil­lion in ex­ports for Canada and grow the coun­try’s fi­nan­cial ser­vices foot­print in Asia, ac­cord­ing to Ad­van­tageBC.

The Cana­dian RMB hub was launched on March 23, 2015, and is in­tended to serve all of North Amer­ica, ac­cord­ing to the an­nounce­ment made at the time.

Speak­ers at the sum­mit also dis­cussed the role and the im­por­tance of BC in Canada’s ren­minbi busi­ness and trade with the Asia Pa­cific re­gion.

Cur­rently, more than 40 per­cent of BC ex­ports go to the Asian re­gion, with half of it to China. The gov­ern­ment of BC was also the first for­eign gov­ern­ment to is­sue off­shore bonds de­nom­i­nated in RMB in 2013.

Van­cou­ver’s fi­nan­cial in­sti­tu­tions are ex­pected to share in the role of pro­vid­ing set­tle­ment ser­vices along with the of­fi­cial clear­ing bank in Toronto.

“Toronto over­laps with the busi­ness days of the set­tle­ment hubs in Europe, and Van­cou­ver over­laps with the start of the busi­ness day in Asia, so we can fill in the whole gap on RMB trad­ing around the clock,” said Colin Hansen, pres­i­dent of Ad­van­tageBC.

“The RMB hub is a great endorsement for Canada as a whole and for the strength of Cana­dian fi­nan­cial in­sti­tu­tions,” he added.

Con­sul Gen­eral Liu ex­pressed op­ti­mism over the Cana­dian hub in BC.

“I trav­elled to more than 30 cities in BC and met peo­ple who are ex­cited about the mar­ket in China, and the ren­minbi as the short­cut to help to get the busi­ness done at a lower cost,” Liu said.

“BC has an ir­re­place­able com­pet­i­tive ad­van­tage in China and Canada’s fi­nan­cial and trade re­la­tion­ship. It is the North Amer­i­can gate­way to the Asia Pa­cific, and Van­cou­ver is an im­por­tant in­ter­na­tional fi­nan­cial cen­tre,” Wang said.

Newspapers in English

Newspapers from China

© PressReader. All rights reserved.