Download 19 July 2011 HSBC EXPECTS RMB TO BECOME THE THIRD

19 July 2011
HSBC EXPECTS RMB TO BECOME
THE THIRD LARGEST TRADE CURRENCY OF THE WORLD
HSBC expects RMB going to be the 3rd largest trade currency of the world, with Asia and the
emerging markets leading RMB trade and investment
Ben Chan, Senior Vice President, Business Planning and Strategy in HSBC Hong Kong,
delivered HSBC strategic vision of RMB's future role as the third largest trade currency and
shared HSBC insights into opportunities RMB capabilities offer Russian businesses at Sixteenth
Saint-Petersburg International Banking Conference which took place on July 13-16, 2011.
According to HSBC estimates:
RMB is expected to become the third most popular currency for trade settlement 1.
Half of China’s trade with the emerging markets, or more than USD 2 trillion per annum,
is expected to be settled in RMB by 20152.
57% of Hong Kong traders is expected to use RMB for trade settlement in the coming six
months3.
HSBC survey1 conducted among 13-hundred companies showed that 8 in 10 companies
in mainland China plan to use yuan in cross-border trades.
“Russia is a key trading partner with China and Russian ruble is one of the few currencies with
direct quotation with the Chinese yuan. Russian companies settling trades with China can benefit
from the greater use of RMB due to natural currency hedge, reduction of transaction costs as well
as diversification of currency holdings,“- said Ben Chan, Senior Vice President, Business
Planning and Strategy in HSBC Hong Kong, the team responsible for the development of the
bank’s offshore RMB business.
HSBC has RMB trade settlement capabilities in over 40 countries, and has completed RMB trade
settlement transactions across all the 6 continents.
“HSBC has the international RMB advantage with its strengths in mainland China and Hong
Kong, as well as its global network of customers who want to trade in RMB. Being at the
forefront of providing RMB product and services means HSBC is ideally placed to advise
businesses on what RMB means for them,” continued Mr. Chan.
"Many financial institutions in Russia do realize the clear trend of the wider use of RMB in the
Sino-Russia trades. With the Group's experience in international RMB business, HSBC will
continue to help our institutional and corporate clients in Russia to capture such opportunities,"
adds Julia Shadrina, Head of Financial Institutions Group, CIS and CEE, HSBC.
1
HSBC Trade Confidence Index
HSBC in-house estimates
3
Results of the survey released on May 31, 2011
2
Additional Information:
HSBC survey4 conducted by HSBC China among its commercial banking customers in mainland
China in 18 Chinese cities showed that 8 in 10 companies in mainland China plan to use yuan in
cross-border trades.
About 45% of the 1,300 companies surveyed said they plan to settle some trades in yuan
in the next year, while 33% said they would consider using the yuan depending on
pricing or services offered by banks. The remaining 22% of businesses said they have no
plans to switch to yuan.
29% of companies based in major cities Shanghai, Beijing, Guangzhou, Shenzhen plan to
switch to settling in yuan in next twelve months (15% – in other cities under the survey)
Of the companies who have started using the yuan for trade settlement, 49% said they do
so to hedge foreign exchange risk, while 44% said the yuan's long-term appreciation was
the reason, the survey showed. In the major cities it was 57% and 49% respectively.
A major obstacle for 37% of mainland Chinese traders who are yet to use RMB as an
alternative trading currency relates to the acceptability of the RMB among counterparties
outside China.
Of this proportion, over half (59%) said their overseas counterparties have difficulties in
obtaining RMB to pay or lack channels to use the RMB they receive as payment. 31%
cited that their overseas counterparties receive insufficient support from banks while a
quarter (25%) said that their overseas partners lacked sufficient sources of knowledge and
information on RMB trade settlement.
Strong demand between mainland China and Hong Kong Demand for RMB settlement
between companies in mainland China and in Hong Kong ranked the highest, with twothirds (66%) of the surveyed HSBC China customers having trading partners based in
Hong Kong, followed by those with partners in other Asia-Pacific countries (40%) and
the U.S. or Europe (31%).
Banks with RMB products/experience and global network most favoured The companies
that are yet to opt for the RMB in settling cross-border trade said they would most favour
banks with a wide RMB product range and experience (67%), followed by banks with an
extensive global network (59%). Less than half (48%) would choose banks based on their
RMB pricing.
4
HSBC China Survey, HSBC Bank (China) Company Limited
HSBC achievements:
Hong Kong and Mainland China
First international bank to settle cross-border trade in RMB in Hong Kong and Macau
A Joint-lead arranger of the First offshore RMB equity IPO
First to issue RMB Bonds in Hong Kong
First foreign bank in mainland China granted Agency Bank status and to complete RMB
cross-border trade
Global
RMB transactions completed across all 6 continents
RMB capability in over 40 countries, across all continents
RMB Personal Banking services launched in 11 Asia Pacific markets
HSBC ranks top in the offshore RMB bond issuance year-to-date 2011
Russia-specific
HSBC is the arranger of the offshore RMB bonds for VTB
In December 2010 HSBC announced its first cross-border renminbi (RMB) trade
settlement transaction in Russia for a subsidiary of «Sportmaster», one of world’s leading
sport retail chains, based in Moscow, Russia.
In January 2011 HSBC Russia issued the first in the Russian market import documentary
credit line in Chinese Yuan
1. HSBC Group
HSBC Holdings plc, the parent company of the HSBC Group, is headquartered in London. The Group serves customers
worldwide from around 7,500 offices in 87 countries and territories in Europe, the Asia-Pacific region, the Americas,
the Middle East and Africa. With assets of US$2,598bn at 31 March 2011, HSBC is one of the world’s largest banking
and financial services organisations. HSBC is marketed worldwide as ‘the world’s local bank’.
2. HSBC Russia
HSBC Group operates in Russia through OOO HSBC Bank (RR). HSBC Russia provides a wide range of corporate
banking, investment banking and financial markets products and services to corporate and institutional customers.
OOO HSBC Bank (RR) («HSBC Russia», «Bank»). General license issued by the Bank of Russia 3290. 2 Paveletskaya Square,
Building 2, Moscow 115054 Russia. The HSBC Group, HSBC means HSBC Holdings plc, the company established in accordance with
and regulated by the laws of England and Wales, and/or HSBC Bank plc, the Bank established in accordance with and regulated by the
laws of England and Wales, and every company that is a member of the group, controlled by this Bank.
ends/all