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RMB hub a huge win for Canadian economy: HSBC Canada

Published by Brad Fougere on November 08, 2014

Hub expected to boost bilateral trade flows, encourage expansion and diversification of Canadian capital markets

As Canada’s leading international bank, HSBC Bank Canada applauds the Bank of Canada and the People’s Bank of China on the signing of a Memorandum of Understanding (MoU) agreement, establishing Canada as the first renminbi (RMB) trading hub in the Americas.

Canada will be the eighth RMB trading hub globally, alongside Hong Kong, London, Singapore, Paris, Frankfurt, Seoul and Doha. China is the largest trading economy in the world, and Canada’s second-largest trading partner behind the United States.

Paulo Maia, President and Chief Executive Officer, HSBC Bank Canada: “The internationalization of the RMB is one of the most significant financial events of the 21st century, and Canadian businesses and the economy as a whole will benefit from Canada’s position as the first RMB trade and investment hub in the Americas.

“In some respects this is business-as-usual for us, as HSBC has been enabling global trade flows between Asia and the rest of the world for 150 years. It’s this legacy of global banking that allows us – and our Canadian clients – access to unique insights and understanding of transacting in RMB, and the broader rules and regulations of doing business with China.”

HSBC has established RMB trade capabilities in more than 50 markets globally, including Canada, and was the first international bank to settle RMB trade on all six continents.

HSBC offers a wide range of market-leading RMB products and services, including payments and cash management, trade and receivables finance, and global markets solutions. HSBC also led the first-ever offshore RMB-denominated bond and initial public offering, and is the number one underwriter of Dim Sum bonds in 2014. British Columbia (BC) became the first foreign regional government to issue a Dim Sum bond last November, with HSBC acting as sole book runner.

Fast Facts:

China & the Internationalization of the RMB:

· The RMB overtook the EUR to become the second-most used currency in
   global trade finance after the USD in December 2013.  HSBC Global
   Research – Rise of the Redback III

· China is the world’s 2nd largest destination for Foreign Direct
   Investments (FDI) in 2013. Overseas Direct Investments (ODI) reached
   USD115bn (ranked 3rd globally excluding tax havens) in 2012.  China
   Going Global Investment Index, Economist Intelligence Unit

Canada / China Trade & Investment:

· China is Canada’s 2nd largest trading partner behind the US, and
trade between the two countries increased 57% between 2007 and 2012. HSBC
Global Trade Forecast – September 2014

· In 2013, bilateral merchandise trade between Canada and China reached
$73.2bn  (inc. $20.5bn in Canadian exports or 7.7% of Canada’s total
merchandise exports) Canadian PMO News Release --

· HSBC forecast: Canada will increase its exports to China by 11%
annually over the next 3 years, and imports from China will grow at an
annualized rate of 8% over the same period. HSBC Global Trade Forecast –
September 2014

Found in: global trade

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