Canada–China Ties Deepen With Renminbi Trading Hub

China’s influence on global capital markets is increasing, but a great deal needs to be done to ensure regulations and reforms keep pace.
Canada–China Ties Deepen With Renminbi Trading Hub
Foreign exchange traders work at North America’s first trading hub for China’s renminbi currency at BMO’s trading floor in Toronto, Canada on March 24, 2015. The Canadian Press/Chris Young
Rahul Vaidyanath
Updated:

Canada and China officially opened the first North American renminbi trading hub in Toronto on Monday, March 23, amid other initiatives that are poised to give the Asian power greater financial influence internationally. These developments give skeptics ongoing concerns about China’s ultimate objectives and are not limited to those regarding its control of yuan trading, capital market reforms, and lack of transparency.

The hub was the result of several months of work since Prime Minister Stephen Harper brokered a deal for Canada to be the first such trading center in North America. Through the Industrial and Commercial Bank of China (ICBC), the designated clearing bank, making and receiving payments in renminbi, also known as the yuan, is now easier for Canadian businesses.

For certain, this is good news for Canadian businesses that can now lower their costs in renminbi transactions, principally instead of using the U.S. dollar as a go-between. It increases the global competitiveness of Canadian firms that deal with Chinese firms. It also bodes well for the Canadian banks that can roll out more products, such as renminbi deposit accounts, and earn fees.

Rahul Vaidyanath
Rahul Vaidyanath
Journalist
Rahul Vaidyanath is a journalist with The Epoch Times in Ottawa. His areas of expertise include the economy, financial markets, China, and national defence and security. He has worked for the Bank of Canada, Canada Mortgage and Housing Corp., and investment banks in Toronto, New York, and Los Angeles.
twitter
Related Topics