renminbi-hub

Renminbi Toolkit

The Province of BC and AdvantageBC have prepared a central source of information, a RMB Toolkit, to assist corporates to learn, prepare and communicate with the industry on this important development.

In November 2014, Canada gained designation from China as the RMB trading hub to serve North America. This development has far reaching implications for trade finance, the financial sector and the Canadian economy as a whole.  With China being the world’s second largest trading nation, the use of RMB as a payment currency will only accelerate. The Asia Pacific region has quickly adopted RMB for payments with China and Hong Kong, increasing from 7% of payments in April 2012 to 31% in April 2015, according to the latest SWIFT figures. It is inevitable that RMB usage will spread to other regions throughout the world, particularly regions that have strong trading ties with China such as Canada. Two-way trade between Canada and China reached $78 billion in 2014.

Canada provides a “Gateway to North America”

The agreement between the federal government of Canada and the PBOC included a reciprocal swap line with the Bank of Canada, the designation of a clearing bank in Canada and a RMB investor quota (“RQFII”) that allows access to Chinese debt and equity markets. By March 2015, the Industrial and Commercial Bank of China (“ICBK”), Canada’s designated RMB clearing bank as “open for business.”

With Canada as the first RMB hub in the western hemisphere, companies based in North and South America can centralize payment activity in their own time zone further minimizing any exchange rate risk. As companies’ strategies for China evolve, it will become increasingly important for RMB services to be available to them in their time zone.

It is important that businesses in Canada and throughout North America understand this evolving trading landscape and the advantages of transacting in RMB.

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Public and Private Sector Cooperation

Federal and provincial governments and agencies and public-private partnerships, such as AdvantageBC, the Toronto Financial Services Alliance (“TFSA”), Finance Montreal, and Export Development Canada (“EDC”), are working with industry to expanding the use of RMB in Canada and the U.S. to promote more trade, investment, and cost savings.

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How to use the RMB Toolkit

1.Significance of Canada’s RMB Hub

2.Background/Context

  • Why China, and its currency, are important to the global economy
  • RMB internationalization history, goals, progress
  • What’s next for RMB/ascendance
  • China’s importance as a trading partner for BC/Canada

3.Canada’s RMB Hub Benefits

4.How to Use the Hub

5.Case Studies 

6.Directory of Contacts 

7. Working Group

8.Glossary

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Did you know?

  • You may be eligible for a refund of BC corporate tax on income from international business activities.
  • BC has some of the lowest corporate taxes in North America.
  • BC has a lower tax rate than Hong Kong and Singapore.
  • Vancouver is among the top-10 wealth management centres in the world.
  • British Columbia is one of the top two designated financial centres in Canada.