- BC Business
Canada stole the spotlight in the offshore renminbi market last week, as it became the first North American country to win an offshore renminbi clearing licence. BC has established a working group with the government of Ontario to collaborate with the banking trade associations of BC (AdvantageBC) and Toronto (Toronto Financial Services Alliance).
An agreement to establish a Chinese currency-trading hub is expected to spur Canadian exports to China and will give Canadian investors earlier access into emerging Chinese capital markets. AdvantageBC and the Toronto Financial Services Alliance have argued that the currency hub could boost trade with China by $500 million a year, in part because it would allow Canadian companies to directly exchange funds from Canadian dollars to RMB.
AdvantageBC extended congratulations to the UK government on their announcement today that they were issuing a bond denominated in the Renminbi, China’s official currency.
In doing so, they became the second Western government to issue a RMB bond, which some refer to as “Dim Sum Bonds”. The government of British Columbia issued a RMB bond in November, 2013.
Today AdvantageBC has released the results of a recent study, “Potential Benefits of a Canadian-Based RMB Settlement Centre,” as the organization participates in a seminar held by the Agricultural Bank of China on Cross-Border Renminbi business. AdvantageBC President and CEO Colin Hansen is set to speak at the event, and will share some details regarding the study’s findings. The report concludes that there is significant and growing interest in the establishment of a Canadian-based hub for direct settlement of trade using Chinese currency, the Renminbi – and that such a centre would be in Canada’s and BC’s interest.
The Toronto Financial Services Alliance (TFSA) and AdvantageBC today announced they would work together, with officials from the federal, Ontario and BC governments, and the financial industry.
In a joint statement Colin Hansen, President and CEO of AdvantageBC, and Janet Ecker, President and CEO of the Toronto Financial Services Alliance, said:
“Canada has many advantages to offer China as a partner in their efforts to encourage the internationalization of the RMB, and as we seek to expand our business and trading relationships with them…”