B.C. aspires to trade Chinese currency

B.C. sets sights on becoming Asia's financial hub in the West

By Tamsyn Burgmann, The Canadian Press

VANCOUVER – In a bid to lure more Chinese investment into the province, British Columbia Premier Christy Clark has billed Vancouver “the most Asian city outside of Asia.”

Clark told an elite trade delegation Monday that the province is ramping up efforts to make trade deals with Asian nations, in part by charting a route to build the first international trading centre for the Chinese currency.

“Most of the world thinks of Asia still, or calls Asia the Far East. We call Asia the West,” she told about 80 senior business executives with the APEC China Business Council to Canada, which represents some of the largest private and state-owned enterprises in China.

In fact, Clark told the invite-only forum her staff reoriented a massive map outside her Vancouver office, and now one side shows western Canada, while the other side displays eastern Asia.

“Which is now, we believe, the centre of the world,” she said. “The decision to build relationships was eminently obvious for us.”

The goal is to establish Vancouver as the first offshore settlement centre for the Chinese currency renminbi — also known as RMB or yuan — in North America, Clark said. The government also wants to persuade five Asian head offices to set up in B.C. from any business sector by 2020, which would be aided by the currency arrangement.

Fifteen global investors are already doing big business in B.C., and the government will introduce legislation in the fall to help convince new, major investors from China to come on the board, Clark added. She outlined a list of reasons why the room should view B.C. as a safe harbour for investment, explaining the government looked to Asia after its biggest trade partner in the U.S. reeled during the economic crisis of 2008.

She was asked later about what the government is doing to regulate or vet investors to ensure the money filtering into the province is legitimate.

“We don’t regulate the private sector from that perspective in British Columbia,” she told reporters, “but we regulate to ensure that we are looking after the environmental and social needs of the province.”

Clark said Vancouver is “actively lobbying” for the RMB centre and believes it makes the better argument over its Toronto competitor. Regardless of which city potentially wins its bid, Clark said the federal government will be instrumental by making the connection between the Bank of Canada and People’s Bank of China.

She said the government hopes to win a decision within a year and believes achieving the RMB settlement status would encourage international banks to locate in Vancouver.

A survey released last week by global banking firm HSBC found that even as the Chinese currency increasingly gains clout around the world, many businesses investing in the country have yet to embrace it.

“Strikingly, around two-thirds of businesses in mainland China and Hong Kong think that foreign firms that do business in RMB benefit financially and build stronger trading relationships,” wrote Simon Cooper, CEO of Global Commercial Banking with HSBC.

“Overseas companies do not all share this view, with awareness of the RMB’s potential advantages varying significantly around the world.”

Clark has led five international trade missions to Asia. The government has built four trade and investment offices throughout China, has doubled their staff, and set up former cabinet minister Ben Stewart as a new, permanent special representative who is based in Beijing.

Last fall, the B.C. government also became the first foreign government to issue bonds into the Chinese RMB market, issuing a one-year-term bond that raised about $428 million Canadian.

About one-quarter of the province’s population is of Asian descent.

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