C.J. Gavsie, Managing Director & Global Head of FX Products & China Capital Markets at BMO Capital Markets, today appeared as an expert witness at the House of Commons Standing Committee on Finance, to discuss the establishment of a Canadian Renminbi (RMB) Hub.
The hub, announced by Prime Minister Stephen Harper during his visit to China this past November, will allow for the RMB to be traded freely with the Canadian dollar.
“This is fantastic news for Canadian companies,” said Mr. Gavsie. “The trading hub will ensure that Canadian firms doing business in China can purchase RMB on the open market without converting to another currency first. As we’ve seen in other jurisdictions, the cost savings will lead to more trade. This, in turn, will create more jobs for Canadians.”
In a recent report, BMO Economics noted that China is now Canada’s second-largest trading partner with activity growing close to a double-digit rate, having already more than doubled over the past decade. Given anticipated solid growth from China, trade ties should only broaden further.
Canada has the potential to become an instrumental lynchpin in generating business unions between the Western world and China, as Toronto is home to over 600,000 Chinese residents, many of whom are English-speaking and yet maintain good business relationships with colleagues in mainland China.
BMO Capital Markets’ methodology clearly reflects this dynamic, the firm being the only Canadian company, and one of only three North American companies, with an established subsidiary bank in China.
The company’s subsidiary bank, Bank of Montreal (China) Co. Ltd maintains branches in Beijing, Guangzhou and Shanghai, allowing the bank the flexibility to expand its product and service offerings for North American and Chinese clients.
Mr. Gavsie also applauded officials at all levels of government for their efforts in establishing the hub: “The Prime Minister, and officials at the provincial and municipal levels across the country, are to be commended for both their vision and their efforts.”
Mr. Gavsie said he was looking forward to the opportunity for BMO to help customers make best use of the RMB hub. “At BMO, our capabilities in China are unmatched by our peers, and we look forward to using our strong foreign exchange capabilities to support our customers as they expand their business ties with China.”