Ontario home to first renminbi trading hub in the Americas

Benefits of transactions in yuan are publicized at an international financial exhibition in Wuhan, Hubei province. HSBC Holdings Plc estimates that about one-third of China's trade will be settled in yuan by 2015. [Photo/China Daily]

Ontario is launching the Americas' first trading hub for the Chinese currency renminbi (RMB), which will enable businesses across Canada to convert Canadian dollars directly into Chinese currency.

The new hub is meant to reduce costs for businesses and boost trade with China, according to Ontario's Ministry of Economic Development, Employment and Infrastructure.

The hub will lower overall business costs for Canadian businesses by removing the need for an intermediate conversion to US dollars, while supporting increased trade between Canada and China, it said.

"The Ontario government is proud to have played an important role in establishing the new RMB trading hub in Canada," said Charles Sousa, minister of Finance.

"The innovative hub will enable Canadian businesses to save money and improve their productivity, stimulating economic growth and job creation in Ontario and across Canada."

The RMB trading hub reinforces Toronto's stature as North America's second-largest financial center, which helps to increase the province's competitiveness on a global scale, he said.

Toronto is the headquarters of Canada's financial services industry, while much of Canada-China trade passes through Vancouver due to BC's close ties to the Asia Pacific market.

It also ranks sixth on Banker magazine's list of best financial centers in the world.

The Canadian RMB trading hub joins an elite group of trading hubs around the world for the Chinese currency, also known as the yuan, the world's second-most used currency in global finance.

With this hub, Ontario becomes a gateway for the flow of RMB through the Americas. Operated through existing financial institutions and infrastructure in Canada, the RMB trading hub will allow Canadian banks and other agents to develop RMB financial currency and exchange services across Canada, and elsewhere in the Americas.

Ontario and British Columbia worked collaboratively in a supportive role to assist the federal government in its negotiations with China to establish an RMB trading hub in Canada.

Recently, Ontario Premier Kathleen Wynne led a trade mission to China that attracted $966 million in new investment by Chinese companies for Ontario. These projects will create 1,800 jobs in communities across the province.

So far, London, Frankfurt, Luxembourg, Hong Kong, Singapore, Taiwan and Sydney all host RMB trading hubs.