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IN PHOTO: 100 Yuan notes are seen in this illustration picture in Beijing November 5, 2013. Picture taken November 5, 2013. REUTERS/Jason Lee

Canada has launched an offshore trading hub for the Chinese yuan, the currency’s first in North America. The clearing house allows direct conversions between Canadian and Chinese currencies without the need to first convert the money into U.S. dollars.

As with its other hubs in Singapore and London, the one in Canada is part of China’s push to promote greater use of its currency in global trade and investment. Canadian authorities believe it will also be a win-win situation for the country as it will help it boost its presence in the world’s second largest economy.

Mike de Jong., B.C.’s Finance Minister, told the Globe and Mail the hub is a “huge opportunity” for B.C. entrepreneurs who account for the largest share of Canada’s trade with China. He stressed the clearing house will help B.C. businesses save on transaction costs, as well as help lead them to expand their presence in that market. He cited as example the 3 percent savings generated on the CA$1.8 billion [$1.8 billion] wood products sold in 2014 into China could translate to about $54 million.

“A hub is a very strong signal to the Chinese government that Canada is eager to align itself with China’s continuing market liberalisation,” the WSJ quoted Jason Henderson, head of global banking and markets at HSBC Bank Canada.

The Canadian-Chinese trading hub, according to a study by the Canadian Chamber of Commerce, could help Canadian firms save $6.2 billion over 10 years. The savings could thus push exports expand by $32 billion worth.

According to the Society for Worldwide Interbank Financial Telecommunication network, the Chinese currency, both known as renminbi or yuan, in November 2014 zoomed to become the fifth most-used currency in the world, surpassing the Canadian and Australian dollar. Two years ago, it was only at the 13th place ranking.

Janet Ecker, president and CEO of the Toronto Financial Services Alliance, told WSJ the benefits of the trading hub will be felt across the country. “For instance, renminbi-based trade finance deals could take place in Vancouver, energy deals in Calgary and derivatives in Montreal,” she said.

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