TORONTO (Reuters) - Canadian businesses lag their global counterparts in using the Chinese renminbi, even after the launch last year of North America’s first yuan trading hub, according to an HSBC survey released on Tuesday.
The bank said usage of the Chinese currency by Canadian companies doing business with mainland China rose to 7 percent of those surveyed from 3 percent in 2015.
This was below the global average of 24 percent and suggests Canadian companies may be missing an opportunity to increase sales to the world’s second-largest economy, it said.
Using the local currency “can improve relationships or attract new buyers to a company’s products. And clearly businesses in other markets are adjusting,” Linda Seymour, head of commercial banking for HSBC Bank Canada, said in a statement.
Canadian businesses are lagging in using the Chinese currency despite the 2015 launch of North America’s first yuan hub in Toronto, which enables the processing of yuan payments outside of China.
Activity in the hub’s first year fell short of the heightened levels expected at its launch and most of the transactions came from the United States, an Industrial and Commercial Bank of China (ICBC) executive said in April.
The Toronto hub may face increased competition in North America after China said in June that it and the United States would each pick a qualified bank to conduct yuan clearing business in the United States.
China is Canada’s second largest trading partner. In September, the two countries said they would start exploratory talks on a free trade pact.
Reporting by Fergal Smith; Editing by Richard Chang