Growing global use of the renminbi (RMB) combined with the Isle of Man’s strong business links with China is giving local firms a growing opportunity to support trade between Europe and the Far East, according to the head of HSBC’s Commercial Banking business in the Isle of Man.

A new survey from HSBC Commercial Banking, the ‘RMB Internationalisation Survey 2016’, shows that almost a quarter of companies are now using the RMB to do business with China. The poll of 1,600 decision-makers across 14 countries, also showed that the use of the RMB has grown 7% around the world over the past twelve months.

Significantly from the Isle of Man’s perspective, 68% of businesses in Europe expect to see an increase in RMB business over the next twelve months, above the global average of 43%, whilst 66% of European businesses are planning to expand or start business with China this year compared to the global average of 40%.

However, the report also shows that few firms are capitalising on the Chinese government’s flagship ‘Belt and Road’ trade initiatives, the name given to a series of policy developments and infrastructure projects designed to spur USD2.5 trillion of cross-border commerce annually. Just 22% of European respondents said they understand the opportunities Belt and Road presents, whilst only 12% of those ‘aware’ businesses in Europe are working on a strategy.

The Isle of Man has established strong connections with Greater China, positioning itself as a gateway to Europe for Asian investors and businesses. In April this year, the jurisdiction signed a Memorandum of Understanding with the Shanghai Municipal Commission of Commerce in China following a government and industry visit to Shanghai to foster cooperation between the two regions.

Warwick Long, Head of Commercial Banking, HSBC Channel Islands and Isle of Man, said:

“China remains an engine of economic growth and the RMB has quickly become the world’s fifth most widely used payment currency. With London positioning itself as a European RMB hub and given the Isle of Man’s strengths in cross-border finance, close relationship with the UK and knowledge of the Far East, there is a real opportunity for it to be a significant supportive player in this growing and exciting area.

“The Belt and Road projects in particular are already presenting huge opportunities for companies that can help develop physical infrastructure such as highways, ports and telecommunications networks. The island should be alert to those opportunities and certainly HSBC, which has such strong roots in China and large presence in the islands, is keen to support this anticipated growth in RMB.”
 
First laid out by Chinese President Xi Jinping in 2013, the Belt and Road blueprint aims to develop two corridors linking China to the world. The ‘Belt’ refers to the historic overland Silk Road trading routes connecting China via central Asia to Europe and the Middle East. The ‘Road’ refers to the maritime equivalents to the south, linking China, Southeast Asia, India and Africa.

Photo - Warwick Long.