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German and French companies are using renminbi to trade (RMB) and now, increasingly, American businesses are too.
More U.S. businesses are using RMB to settle trade and more plan to use it amid expectations by business leaders that their trade with China will increase in the next 12 months.
Seventeen percent of U.S. businesses leaders said their companies had used RMB to settle trade this year, up from nine percent last year, according to an HSBC global survey of international business decision makers in 11 countries, including 102 in the U.S. The global average was 22 percent. This places U.S. businesses just behind French (26 percent) and German (23 percent) businesses in terms of RMB use outside of China, Hong Kong and Taiwan.
Furthermore, 22 percent of U.S. businesses, who aren’t already using RMB, said they plan to use it within the next six months to five years, up from eight percent a year ago. Globally, an average of 32 percent of leaders said they planned to use RMB in the future.
“As China continues to internationalize its currency, there are more opportunities and considerations in trade, investment, cash management and funding for U.S. companies,” said Steve Bottomley, Group General Manager, Senior Executive Vice President, and Head of Commercial Banking for North America, HSBC Bank USA, N.A. “U.S. businesses are becoming more comfortable using RMB and are increasingly making it, or looking to make it, a part of their competitive strategy and planning.”
Trade with China Set to Grow
U.S. business leaders may have good reason to do so. In the next 12 months, 55 percent of U.S. businesses said they expect trade with China, the world’s largest trading nation, to grow, though this is down from last year, when 76 percent said it would.
U.S. businesses now sell about seven percent of their exports to China, compared to just one percent a decade ago, and HSBC expects that to increase to 14 percent by 2030. HSBC also forecasts that a third of China’s trade will be settled in RMB by 2015 and that the currency will be fully convertible by 2017.