Industrial and Commercial Bank of China Designated as the First RMB Clearing Bank in North America
Industrial and Commercial Bank of China (Canada) was designated as the RMB clearing bank in Toronto, according to an announcement made by the People’s Bank of China (PBOC) on November 9, 2014. This is the first time for PBOC to authorize a clearing bank for the RMB business in North America. Prior to this appointment, Industrial and Commercial Bank of China (the Bank Group) has successfully established PBOC-authorized RMB clearing banks in Singapore, Luxemburg and Qatar. This appointment is also considered as an important milestone for the Bank Group’s move to promote RMB internationalization. The Bank Group is now the first merchant bank with RMB clearing network across three continents in Asia, Europe and America, couple with a 7*24 non-stop RMB clearing system.
China and Canada are strongly complementary to each other in economy. In recent years, with the rapid growth of international business between the two countries, China has become Canada’s second largest business partner. According to China Customs, the bilateral trading volumes in 2013 totaled US$54.4 billion, increased by 6% as compared to 2012. With the increasing number of visitors travelling between the two countries, it is claimed that there are around 1.5 million Chinese living in Canada. In 2013, the number of Chinese overseas students was more than doubled that in 2006. As the result of the Agreement of the Approved Destination Status (ADS) signed by both countries in 2010, the demands for RMB related businesses have been raised dramatically. The successful establishment of RMB clearing hub in Canada will significantly reduce trading cost, and greatly benefit the corporations between the two countries.
Industrial and Commercial Bank of China acquired Bank of East Asia (Canada) in 2010, and officially renamed it as Industrial and Commercial Bank of China (Canada). Meanwhile, Industrial and Commercial Bank of China (Canada) has been working with its affiliates in USA to establish a broad financial network in North America. The RMB business services in Industrial and Commercial Bank of China (Canada) are extended to retail, corporate and institutions sectors, while the services include but not limited to foreign exchange, trade finance, remittances, overseas lending, and offshore money market. In 2013, Industrial and Commercial Bank of China (Canada) and Union Pay International jointly issued the very first CAD and RMB dual currency credit card in North America. The bank also participated into the¥2.5 billion offshore RMB dim sum bond issued by BC government.
The Bank Group launched its cross-border RMB businesses pilot project in latter 2009. Since then it has devoted itself to promoting the internationalization of RMB, enhancing its global-wide services ability and improving the RMB clearing system. The Bank Group has been working on expanding its RMB clearing networks and has successfully established a diversified and efficient cross-border RMB business operational platform. Five years later, the average annual growth rate of RMB business was over 200%. By the end of September 2014, the Bank Group’s cross-border RMB businesses trading volumes accumulated to ¥7700 billion. For the first three quarters of 2014, RMB business volumes have already reached ¥2800 billion, increased by 60% compared with last year.
Being the first RMB clearing bank in Toronto, Industrial and Commercial Bank of China (Canada) will further contribute to the RMB internationalization plan of the Bank Group and promote the cross-border RMB businesses in Canada through the launch of a full range of RMB products and services.