Canada seeks to become yuan trading centre

The Toronto Financial Services Alliance and AdvantageBC are partnering with government and the financial industry to promote Canada as a trading hub for the Chinese currency, the Renminbi.

The Renminbi is the second-most-used currency in the world. Hong Kong, Singapore, London, Frankfurt, and Luxembourg have all recently become RMB hubs, but there yet to be an North or South American hub.

Read: Markets worried about Chinese economy

Trade between Canada and China has increased to $73 billion in 2013, an increase of 60% from 2009. Canada’s time zones, its well-developed financial infrastructure, capital markets and risk management expertise, the strong economic relationship between the two countries, and a growing Chinese population in both Toronto and Vancouver make the country a strong candidate, say AdvantageBC and the Toronto Financial Services Alliance.

Read: Will yuan become the new default?

Members of the Canadian business community support the initiative.

“The establishment of Canada as a RMB centre will continue to raise our stature as a global financial centre and will facilitate increased trade and investment with China, thus benefitting the entire Canadian economy,” said Perrin Beatty, President & CEO of the Canadian Chamber of Commerce. The Canadian Council of Chief Executives, the Canadian Manufacturers & Exporters and the Canada China Business Council also support the idea.

Work to lure Chinese investors is already underway. In 2013, British Columbia issued a government bond denominated in RMB. It was quickly oversubscribed, largely by Asian investors.

Read: China woos foreign investors with renminbi relief

Also last year, Ontario’s TFSA established a working group with representation from thirteen national financial companies and three public sector observers (see list below). The working group is co-chaired by financial executives from BMO Financial Group, HSBC Bank Canada, Bank of China (Canada) and the Industrial and Commercial Bank of China (Canada).

A similar group is being established in British Columbia. TFSA and AdvantageBC have also established a steering committee to coordinate the work of the two groups.

Staff

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