Yuan rising: Singapore’s RMB usage climbs by 4% in 2014

15% of firms now use the yuan for cross-border deals.

For many Singapore companies, the renminbi is fast becoming the currency of choice for international transactions. An HSBC survey revealed that 15% of companies in Singapore now use the RMB to settle cross-border business, an increase from 11% last year.

Outside the Greater China region (mainland China, Hong Kong and Taiwan), businesses in France (26%) and Germany (23%) report the highest levels of RMB usage.

The survey also found that 1 in 2 Singapore businesses believe in the financial benefits of using the RMB.

“It is encouraging to see that more Singapore businesses are taking advantage of the benefits of transacting in RMB. Given Singapore's position as a regional financing hub and the gateway to ASEAN, Singapore-based local corporates and MNCs are very well positioned to benefit from the increasing liberalisation of the RMB,” said Joseph Arena, Head of Global Trade and Receivables Finance, HSBC Singapore.

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The survey also found that whilst two-thirds of companies in mainland China and Hong Kong said foreign firms doing business with China gain financial and relationship advantages from using RMB, awareness of these potential benefits varies widely overseas, according to the 11-market poll.

Half of respondents from Singapore, 44% from the US and 42% from the UK said they believe RMB usage brings financial benefits, yet less than a third of their German and Canadian peers share this view. More than half of UAE respondents said they see business relationship benefits from RMB adoption, compared with 46% in France and 40% in Australia.

“The survey results are consistent with what we are seeing on the ground – as the leading international bank for trade, our clients have entrusted us with managing the opportunities and risks of doing business with China which has translated into a doubling of HSBC's RMB trade business over the past year.

At HSBC Singapore we are connecting clients to these opportunities, leveraging our network across China to provide cross-border RMB working capital solutions such as the recent RMB loan facilities of 150 million yuan to two corporates registered with the Suzhou Industrial Park (SIP),” Arena noted.