Growing global use of the renminbi (RMB), combined with Jersey and Guernsey’s strong business links with China, is giving local firms a growing opportunity to support trade between Europe and the Far East, according to Warwick Long, Head of Commercial Banking for HSBC in the Channel Islands and Isle of Man (pictured).
A new survey from HSBC Commercial Banking, the RMB Internationalisation Survey 2016, shows that almost a quarter of companies are now using the RMB to do business with China.
The poll of 1,600 decision-makers across 14 countries, also showed that the use of the RMB has grown seven per cent around the world over the past 12 months.
Significantly, from a Channel Islands perspective, 68 per cent of businesses in Europe expect to see an increase in RMB business over the next 12 months, above the global average of 43 per cent, whilst 66 per cent of European businesses are planning to expand or start business with China this year compared with the global average of 40 per cent.
However, the report also shows that few firms are capitalising on the Chinese government’s Belt and Road trade initiatives – a series of policy developments and infrastructure projects designed to spur US$2.5 trillion of cross-border commerce annually.
Just 22 per cent of European respondents said they understand the opportunities Belt and Road presents, while only 12 per cent of those businesses aware of it in Europe are working on a strategy.
Both Jersey and Guernsey have established strong connections with Greater China, positioning themselves as gateways to Europe for Asian investors and businesses, with Jersey Finance and Guernsey Finance having representation in Hong Kong and Shanghai.
Warwick Long said: "China remains an engine of economic growth and the RMB has quickly become the world’s fifth most widely used payment currency.
"With London positioning itself as a European RMB hub – and given Jersey and Guernsey’s strengths in cross-border finance, close relationships with the UK and knowledge of the Far East – there is a real opportunity for them to be significant supportive players in this area.
“The Belt and Road projects in particular are already presenting huge opportunities for companies that can help develop physical infrastructure such as highways, ports and telecommunications networks. The islands should be alert to those opportunities."
• To read the RMB Internationalisation Survey 2016 click here