LONDON, 24-3-2015 — /EuropaWire/ — Small businesses in the UK are embracing renminbi (RMB) to settle cross-border trade faster than other countries in Europe and North America, a survey from HSBC has indicated.
Small businesses in the UK are embracing renminbi (RMB) to settle cross-border trade faster than other countries in Europe and North America, a survey from HSBC has indicated.
The latest HSBC RMB internationalisation survey, which investigates businesses’ experience of – and attitudes towards – the Chinese currency in 14 major markets, revealed that among UK small companies which do business on the Chinese mainland, RMB was used to settle 17 per cent of trade. The comparable figure for Germany was four per cent, and 12 per cent for the United States.
The increase in use of RMB to settle international trade has been driven in part by the depreciation of the currency in 2014. In December last year, the currency also became the fifth-most used in global payments according to SWIFT data.
Those British businesses not currently using RMB also tend to have more concrete plans to start using the currency in the future than those in other countries. More than a quarter of UK businesses (26 per cent) are planning to start using RMB, similar to 25 per cent of German businesses but significantly ahead of French companies (11 per cent).
In terms of optimism about RMB internationalisation overall, companies in the UK also stand out from their peers. Around 29 per cent of UK businesses believe RMB will become a fully internationally traded currency like the Dollar or the Euro in the next five years. This compares with 23 per cent of French businesses, 15 per cent of German firms and 14 per cent of US firms.
HSBC’s UK Head of Global Trade and Receivables Finance, Mark Emmerson, said: “UK companies are recognising the benefits of RMB and taking advantage. It’s particularly encouraging to see that our small businesses are leading their peers when it comes to settling in RMB with their export and import partners. These companies aren’t just talking about RMB; they are buying and selling goods and services in the Chinese currency.”
Though the survey shows UK businesses relatively positive and confident about adopting the Chinese currency, it also indicates a persistent lack of understanding among non-users in all markets about the full benefits that using RMB can offer. More than half of all businesses internationally say they have a poor understanding of the advantages of using RMB, with only seven per cent claiming a “very good understanding” of RMB benefits.
In the UK, 45 per cent of businesses believe they understand the benefits of RMB very well or quite well, on a par with businesses in the US (46 per cent) and Germany (48) per cent but behind markets in Asia such as Taiwan and Hong Kong.
Mark Emmerson added: “2014 was clearly the year that RMB entered the business mainstream, but we all need to do more to make the benefits of RMB clear and understandable for UK firms. Whether it’s reducing their exposure to currency fluctuations, or simply getting a cheaper price from a supplier, the benefits of trading in the currency of the world’s biggest trading nation are too great to ignore.”
For its 2015 survey HSBC polled more than 1,600 decision-makers from Australia, Brazil, Canada, mainland China, France, Germany, Hong Kong, Malaysia, Singapore, South Korea, Taiwan, the UAE, the UK and the US who represent companies that conduct international business with or from China.