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Western trading in China’s RMB is low

Canadian companies five times less likely to use it than global peers.


VANCOUVER — Canadian companies are the second least likely to use Renminbi (RMB) for trade settlement with China, according to an annual global survey by international bank HSBC.

Only 3% (5% in 2014) of the Canadian businesses surveyed said they had conducted cross border transactions in the Chinese currency, compared to 17% of global companies and to 10% (17% in 2014) of US companies.

HSBC says this leaves them open to unnecessary foreign exchange risk.

Globally, RMB use remains primarily driven by the Asia Pacific markets and use in the region remains broadly on a par with results from last year’s survey. Outside of the Asia Pacific region, the bank says use in Europe and the Americas remains comparatively low and has weakened compared to last year, likely due to fluctuations in the external value of the RMB against non-dollar currencies in the second half of the year and the growing strength of the US economy.

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Among Canadian businesses surveyed, 62% expect to increase their cross-border trade with China in the next 12 months (ahead of global peers at 54%). However, 22% of Canadian firms (versus 27% globally) not using the RMB today are planning to use it in the future.

Canadian management teams are in line with global peers in terms of discussing the RMB as a potential opportunity or business enabler – 16% in Canada versus 22% globally.

Non-RMB users who plan to use RMB in future cite a reduction in foreign exchange risk and the benefits from market disparities between the onshore and offshore RMB market as the main motivators to do so.

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