San Francisco is aiming to become North America’s first offshore hub for trading in China’s renminbi. The West Coast city wants to become the go-to destination for anyone opening a savings account, conducting trade, or investing in the Chinese currency. But as CCTV’s Rebecca Bowring reports, it could be facing stiff competition.
Potential U.S. financial hub for Chinese RMB in San FranciscoSan Francisco is aiming to become North America's first offshore hub for trading in China's renminbi. The West Coast city wants to become the go-to destination for anyone opening a savings account, conducting trade, or investing in the Chinese currency. But as CCTV’s Rebecca Bowring reports, it could be facing stiff competition.
Money makes the world go round and also brings it closer together.
Some of the San Francisco Bay Area’s more than 230,000 Chinese residents come to Chinatown to do their banking – including receiving funds from relatives back home.
If San Francisco has its way, it may soon get easier to make deposits in Chinese renminbi – cutting down on the costs of currency exchange.
Following successful experiments in Hong Kong, London, Singapore and Frankfurt, San Francisco wants to position itself as the first North American hub for business transactions in renminbi.
Darlene Chiu Bryant, Executive Director of ChinaSF, said: “We are the gateway to the Pacific as well as the gateway to the rest of the United States. We have a huge population in terms of percentage-wise of Chinese from China and as well many Chinese investors when they come to the U.S., their first destination will be San Francisco.”
ChinaSF — a public-private platform that recruits services and investment from China and helps Californian companies do business there — is spearheading the city’s bid.
Chiu Bryant says California is already China’s biggest U.S. export partner. A San Francisco currency hub would allow companies selling goods to China to be paid in renminbi, which they could then either convert to dollars, or reinvest IN China.
Darlene Chiu Bryant also said: “The renminbi can be remitted to San Francisco and then in San Francisco there will be a bank who will be able to help them just convert it to U.S. dollars or what have you so that they can make the transaction happen right away.”
As it opens up its once tightly-controlled financial markets, China is seeking to increase the influence of renminbi overseas.
And offshore currency hubs pay dividends for local markets driving job creation and fresh investment in sectors such as housing.
But in San Francisco the tech-fuelled escalation of real estate prices, to which Chinese homebuyers have contributed, has been a source of community tension.
Stanley Kwong, Managing Director of China Business Studies Institute at the University of San Francisco, said: “There’s not enough housing for everybody and when you start having another group of very high paid professionals, I believe most of them will consider living in the city because they like the lifestyle, yet the good point about it is you’re looking at much better business for our restaurants and much better business for our service industry.”
North America has been slow to establish its own renminbi hub because of banking regulations that differ from those in Asia and Europe.
San Francisco is competing with Toronto, Vancouver and the financial services heavyweight, New York, to claim the mantle.