Canadian firms missing out on advantages of the renminbi

Canadian businesses trading with China are missing out on new opportunities and cost savings because they aren’t using renminbi, the world’s fastest growing currency, reveals a 2016 HSBC global survey of business decision-makers in 11 countries.

Globally, 40% of countries recognize a business advantage in using RMB. For Canadian businesses, that drops to 22%.

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Accordingly, the percentage of Canadian businesses using the renminbi (7%) lags well below the global average (24%), despite the renminbi becoming easier to use. According to the survey, respondents report having less difficulty understanding regulations, navigating documentary requirements and moving funds than in the past.

That sentiment is courtesy of China’s “belt and road” initiative, first laid out in 2013. It aims to improve trade through a series of policy developments and infrastructure projects in order to spur US$2.5 trillion of cross-border commerce annually.

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Linda Seymour, executive vice-president at HSBC Bank Canada, says in a statement: “Many of the themes driving growth in the Chinese economy play to Canada’s strengths — including the massive investment in infrastructure. China remains an engine of global growth and a must-be market for Canadian companies. And yet, few Canadian companies understand the scope of the ‘belt and road’ initiative and most of these still have not factored this into their corporate strategies.”

The survey polled 1,600 companies that currently do business with China or that are located in China and trade outside the region.

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Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.