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.
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.
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.
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.