Why use the Renminbi?

  • A readiness to do business in RMB gives exporters a vital edge
  • A majority of foreign firms doing business with China gain financial and relationship advantages from using RMB
  • Easier to do business with a Chinese small and medium sized client when payment is made in RMB:
    • RMB letters of credit and cash financing are easier to obtain and more flexible
    • Can bypass China’s foreign exchange agents, who impose fees and enforce quota
  • The Renminbi (RMB) provides many advantages for corporate clients, SMEs, asset managers and retail customers:
    • Ability to deal in a local market which is efficient, convenient, transparent and familiar
    • Opportunity for corporate savings through potential discounts by Chinese businesses and the elimination of FX premiums
    • Hedging advantages – by hedging in renminbi, companies can reduce risk in invoicing and lower the transaction costs of trade and investment
    • RMB provides new investment options for investors searching for yield such as renminbi-denominated debt and investment products
    • A RQFII quota of 50 billion RMB allows investors to buy Mainland investment products using offshore renminbi
    • Ability to deal in a North American time zone for RMB
“A recent survey by HSBC showed that 55% of Chinese businesses said they would offer discounts of up to 5% to their trading partners for RMB denominated transactions.”

HSBC, RMB Survey

“Canadian Companies are embracing trade with Mainland China. 74% of Canadian companies surveyed expect to increase trade with the country in the next 12 months – well above the global average of 59%.”

HSBC, Corporate Survey


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