Canadian opposition urges govt to secure trading hub of RMB

The Canadian opposition New Democratic Party (NDP) on Wednesday appealed to the federal government for securing a trading hub of renminbi, the Chinese currency also known as Yuan, in North America.

In an official letter sent to Canadian Minister of Finance Joe Oliver Wednesday, the NDP said "as the yuan is increasingly becoming a global currency, there would be great advantage to the Canadian economy to secure the first North American settlement centre."

It stressed that securing a renminbi settlement center would provide Canadian financial sector with an excellent opportunity of growth, as well as attract business to Canada. "In the six months of London, UK acquiring settlement capabilities trade services in yuan increased by 390 percent, import/export financing increased by 19 percent and the aggregate foreign exchange volume increased by 150 percent. If we were able to secure the first North America renminbi settlement hub, this would certainly increase our presence in the global financial market," the party said in the letter.

It also pointed out that securing a renminbi settlement hub would also reduce fees that Canadian businesses must pay to transact with China.

Currently, Canadian companies that wish to conduct business in yuan must pay to convert Canadian dollars to either euros or American dollars, then again to convert the second-stage currency into renminbi.

The opposition party also emphasized that the federal government should be an active partner in supporting the work of organizations such as Canada-China Business Council, the Toronto Financial Services Alliance, Advantage BC that have been leading the efforts to lobby for establishing a renminbi trading hub in Canada.