Over 4 out of 10 Singapore firms eyeing more trade with China in 2015: survey

15% of businesses are using RMB for settlement.

A survey released today by HSBC showed that 41% of local businesses expect to increase their cross-border trade with China in the next 12 months.

The survey showed that in Singapore, renminbi usage for cross-border settlement remained the same as last year at 15%.

Among non-users, 32% of Singapore businesses are planning to start using the renminbi in future. These businesses cite FX risk/cost minimisation as the primary motivator of future RMB usage for cross-border transactions; with the next motivator being getting cheaper pricing or offering more competitive pricing.

In addition to the anticipated usage of RMB for import/export transactions, businesses in Singapore, Hong Kong, Taiwan and the UAE are also more likely to use RMB for investments, DC, and liquidity management solutions in the next 12 months.

Awareness among Singapore businesses of the recent developments in relation to the Shanghai Free Trade Zone (SFTZ) is at 65% compared to 55% a year ago.

“The implication is that businesses are trading in RMB because it offers a number of practical benefits rather than for short-term speculation. We expect that the continued liberalisation of the currency will help spur awareness and greater usage among corporates globally,” said Joseph Arena, Head of Global Trade and Receivables Finance, HSBC Singapore