Prime Minister Stephen Harper today left for an official visit to China, according to Chinese media reports, during Harper’s visit to China the most important thing is to declare Canada and China have reached an agreement on the establishment of the Canadian offshore renminbi clearing center, and this center will be located in liquidation Toronto, has been settled for this purpose may be futile provincial government of British Columbia in Vancouver. Another important point is that when Prime Minister Stephen Harper’s visit to China for the Chinese President Xi Jinping invitation to visit Canada as reciprocity, the Chinese government will be releasing detained on suspicion of espionage and Canadian citizens Garrat couples.
All along, Vancouver and Toronto are the first in North America for the establishment of the RMB clearing center, BC more successful issuance of RMB bonds in order to show its determination. But in this battle, and ultimately defeated Canada’s financial center in the hands of Toronto; and Toronto also took the consolidated financial center of North America.
Bank of Canada Governor Pu Luosuo (Stephen Poloz) in Harper’s visit to China on the eve of the press conference stressed that offshore renminbi clearing center is a positive development, while Canadian exporters and Chinese buyers to do business, do not need to convert a dollar increase in cost.
BMO global head of foreign exchange products 贾维西 (CJ Gavsie) believes that after the establishment of the renminbi center, you can further enhance Canada’s competitiveness in the foreign exchange market trading, and has set up a renminbi center in London, Hong Kong and Sydney to compete in more favorable .
Canadian Chamber of Commerce has supported the establishment of the renminbi clearing center in Canada, a senior analyst at the Chamber of Commerce Bakau (Hendrik Brakel) said that at present almost all the increase in trade is denominated in dollars. So just the Canadian dollar directly converted into yuan, no agency in US dollars, solely from the redemption cost point of view, you can save a lot of costs.
RMB clearing center for outgoing messages will be settled in Toronto, Ontario, Wayne, on the 4th Governor expressed the hope that is really based in Toronto, because it itself is a financial services center.
Why Toronto RMB clearing center to fight?
Since 2009 China began a pilot RMB settlement of cross-border trade, the RMB can begin to scale output overseas. Users offshore RMB market, as long as the funds do not occur with dealings in China, you can enjoy the euro and the dollar similar, not in China’s financial services capital controls. Interest and exchange rates are determined by the market, but also the Chinese territory – that is, in the shore – different markets.
So, whether it is based on the convenience, freedom or risk control, and even motivation arbitrage, coupled with policy support inside and outside of the offshore renminbi market to flourish again. Existing in the offshore renminbi market in which the total amount of customer deposits have more than one trillion yuan RMB. If these payments in RMB outside China as a kind of currency, then the currency is already the world’s seventh-largest currency of payment, the amount of their monthly payment of $ SGD and even beyond the Swiss franc. And the currency of payment ranking in January 2012, when the first 20 or the world. Such trading volume, so the growth momentum, so that the offshore renminbi business as a financial institution, the financial industry as well as a region, has people can not be overlooked.
Toronto compete for a position in the center of the offshore RMB market, whether it is in competition for some of it?
RMB clearing bank’s role is to build a bridge between Canada and the territory of China, and can provide an infrastructure for RMB clearing bank in Canada. That is, after have a RMB clearing bank, the Bank of Canada may be more convenient to help customers pay for the renminbi to the Chinese territory, and vice versa; the same time, the RMB clearing bank as a central, local banks go to the RMB clearing bank account.
Of particular note is that here in Canada, “local” is a relatively broad concept, not necessarily confined within Canada, because, according to the Canadian financial regulations, the clearing bank for foreign banks to open RMB interbank accounts, then formed network can be extended to more countries, the formation of radiation effects.
Industrial and Commercial Bank of China (Canada) Zhu Ming, general manager told Ming Pao interview, he said that the establishment of offshore renminbi settlement center is not the construction of the offshore RMB market is all about. Construction of the offshore renminbi market is a systematic project, including direct exchange currency swap agreements between governments, the Canadian dollar and the yuan, the construction of the renminbi foreign exchange trading, investment and financing, derivatives and other market support mechanisms and so on.
RMB offshore market developed well, one can help companies directly in RMB pricing and billing, helping companies save in dollars and bring to an intermediate currency denominated exchange rates and efficiency losses, especially in favor of trade between China and Canada in commodities ; on the other hand can push local financial institutions RMB deposits, foreign exchange trading, trade financing, yuan-denominated bonds, stocks and innovation and the development of other financial derivatives, thereby facilitating the participation of various types of market players plus investment and trade, Canada to promote trade and create a bigger, more dynamic bilateral market; also may radiate to other countries in the Americas region, attracting them through Canada to handle RMB business.