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Toronto RMB hub gateway to China for N. America, experts say

Xinhua, May 29, 2015 Adjust font size:

A RMB trading hub in Toronto will serve as a gateway to China for North America, and an internationalized Chinese currency will benefit investors from both Canada and China, experts said here Thursday.

Addressing an event hosted by Bloomberg and the Toronto Financial Services Alliance, Ontario Minister of Finance Charles Sousa said that China is Canada's second-largest trading partner and the newly-opened RMB hub in Toronto is the first one of its kind in the Americas, which will help strengthen economic ties between China and Canada as well as with the region.

Toronto, with competitive advantages of lower cost and risk, and higher credibility, positions itself as a gateway to further tap business opportunities and renew economic growth in Ontario and Canada, Sousa said.

"So why not take advantage of Canada's new RMB trade hub, it's good for both the financial service industry and international trade, it's win-win for us all," he said.

Presenting China Macro Outlook 2015 at the seminar, Bloomberg's chief Asia economist Tom Orlik said China's growth is slowing down in 2015 due to difficulties in both supply and demand, but China is still going to lead the global growth.

In a real-time poll at the event, most participants believed the internationalization of the RMB will take more than five years, but Orlik said it has in fact already taken place.

As to when the RMB, or Chinese yuan, will be included in the IMF Special Drawing Rights basket, Orlik believed it is merely a political decision by the United States.

Caroline Owen, regional head of RMB solutions at Standard Chartered Bank, said that a significant 31 percent of trade in the Asia Pacific region has been settled in RMB, while the Chinese currency stands at only 2 percent of the total world trade settlement, disproportionate to the country's gigantic economy.

With expressive charts and pictures, Owen conveyed the clear message that it's easier and faster to settle in RMB than in foreign currency.

"Internationalization of the RMB is an irreversible trend," she concluded in her presentation.

RMB business has been boosted ever since the RMB clearing bank in Canada, ICBC Canada, was officially launched in Toronto on March 23.

Earlier this week, Bank of China (Canada) and Korea Exchange Bank of Canada signed a MOU to jointly develop RMB offshore business in Canada. Endi