BC Minister of Finance Michael de Jong gives the keynote address at the Pacific Finance and Trade Summit held on June 16. [Photo/Weiyuan Li]

Canadian financial institutions and businesses were urged to take advantage of renminbi (RMB) globalization at Canada's inaugural RMB event, held in Vancouver.

The Pacific Finance and Trade Summit, co-hosted by the Province of BC and AdvantageBC, brought together government officials, financial industry leaders and banking representatives from China and Canada to educate Canadian stakeholders on economic and trade opportunities provided by Canada's role as a settlement hub for the RMB on June 16.

Key speakers included Liu Fei, consul general of China in Vancouver; BC Minister of Finance Michael de Jong; and Teresa Wat, BC minister for international trade, Asia Pacific strategy and multiculturalism.

The overview presentation by Peter Hall, chief economist of Export Development Canada, and luncheon address by Rongrong Huo, head of China and RMB business development for HSBC, both highlighted changes that are occurring in the uses of global currency and in RMB business, which Canadian businesses can capitalize on.

The summit also included four panel discussions held by financial and banking representatives covering Canadian banks' role in global finance, Chinese banks' role and settlement hubs, Canadian cities' status as the world's top financial centres and how Canadian businesses can use the RMB settlement services.

Representatives from top Chinese financial institutions had the chance to speak directly with Canadian business leaders, sharing their views on how to better work with each other and tap into new markets.

The need for Canada to diversify and more actively promote its RMB services to businesses across the Americas, taking advantage of the RMB's current rapid globalization, was the theme of the summit.

In the keynote speech, de Jong stressed that the RMB hub is "a limited time competitive advantage that won't last forever, but it is a unique opportunity if we choose to take advantage.”

"It's the moment in time when Canada gets to decide to strengthen our relationship with this growing economy that's re-establishing itself as an economic powerhouse,” de Jong said.

The RMB has become the world's fifth most used currency for trade as of March 2015, and is the second-most used currency in international trade finance. In a speech, Wang Wei, executive vice-president of the Agricultural Bank of China, pointed out that the volume of renminbi payments in Canada had increased more than 200 percent over the past two years.

China is moving toward making the RMB fully convertible and has requested the International Monetary Foundation to recommend it as a global reserve currency by as early as fall, 2015. To date, the Chinese central bank has signed currency swap agreements with 31 central banks and monetary authorities around the world.

"Renminbi infrastructure is being built very rapidly across Asia, Europe and now the Americas and the most obvious pieces to this process are the renminbi hubs,” Hall said, stressing that the global rise of the status of the RMB is "not a question of if, but when.”

But as other countries are also taking advantage of the favourable backdrop for RMB business, Hall believes that Canada cannot take its position for granted.

"Canada's RMB hub is the first in the Americas but not the first in the world,” Hall said. "Canadian companies will need to keep pace if they want to protect their market share inside of China.”

An RMB settlement hub can reduce currency exchange costs, reduce transaction risk, and allow faster and more direct payments for Canadian businesses trading with Asia, which could make Chinese small- and medium-sized businesses favour doing business with Canadian partners.

The ability to directly trade in RMB is also expected to add as much as $32 billion in exports for Canada and grow the country's financial services footprint in Asia, according to AdvantageBC.

The Canadian RMB hub was launched on March 23, 2015, and is intended to serve all of North America, according to the announcement made at the time.

Speakers at the summit also discussed the role and the importance of BC in Canada's renminbi business and trade with the Asia Pacific region. Currently, more than 40 percent of BC exports go to the Asian region, with half of it to China. The government of BC was also the first foreign government to issue offshore bonds denominated in RMB in 2013.

Vancouver's financial institutions are expected to share in the role of providing settlement services along with the official clearing bank in Toronto.

"Toronto overlaps with the business days of the settlement hubs in Europe, and Vancouver overlaps with the start of the business day in Asia, so we can fill in the whole gap on RMB trading around the clock,” said Colin Hansen, president of AdvantageBC.

"The RMB hub is a great endorsement for Canada as a whole and for the strength of Canadian financial institutions,” he added.

Consul General Liu expressed optimism over the Canadian hub in BC.

"I travelled to more than 30 cities in BC and met people who are excited about the market in China, and the renminbi as the shortcut to help to get the business done at a lower cost,” Liu said.

"BC has an irreplaceable competitive advantage in China and Canada's financial and trade relationship. It is the North American gateway to the Asia Pacific, and Vancouver is an important international financial centre,” Wang said.