HSBC has completed its first New Zealand cross-border renminbi (RMB) transaction directly with China, following the extension of the RMB trade settlement pilot programme to all countries and regions in the world in June 2010, the bank said in a press release.
The landmark transaction was completed for Longbeach Holdings Limited, an apparel and fashion business which sources and produces apparel for a wide variety of retailers and direct marketers. Longbeach Holdings Limited also owns a number of different brands including the iconic Kiwi brand, Swanndri.
David Griffiths, CEO, at HSBC New Zealand, says: “We’ve been working towards completing our first RMB transaction for some time now and this represents a milestone for New Zealand in terms doing business with China.”
“Until the end of June only ASEAN countries were able to complete transactions directly with China, however, with the Chinese government recently announcing the rest of the world as eligible, HSBC New Zealand has taken quick advantage of this opportunity,” adds Griffiths.
It will now become easier for New Zealand companies to make payments to their suppliers in yuan, rather than having to convert to US dollars. It will also make it simpler for businesses to export and import goods to and from China,” says Griffiths.
Longbeach Holdings’s CEO Craig McCallum says: “Having the ability to pay our business parnters directly in RMB will assist us to maintain a competitive supply chain and keep us at the forefront of the industry.”
Griffiths adds: “This is an important step towards the RMB becoming an international currency in global trade. We believe the expansion of the pilot scheme will increase the volume of RMB denominated trade outside ASEAN and as a result we expect to see increasing demand for offshore RMB trade and payment solutions.
“The great thing about this transaction is that we can replicate this with other New Zealand clients, which we look forward to doing,” Griffiths says.