Following successful experiments in Hong Kong, London, Singapore and Frankfurt, San Francisco is aiming to become North America’s first offshore hub for trading in Chinese currency.
The U.S. West Coast city hopes to become the go-to destination for anyone opening a savings account or conducting trade in renminbi, as well as taking in money from China to invest.
It faces stiff competition from other North American financial centers, but wherever the hub lands, it’s hoped a positive Chinese investment “ripple effect” will be felt across the whole continent.
Rebecca Bowring reports.
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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.
UPSOT, Darlene Chiu Bryant
Darlene Chiu Bryant is the Executive Director of ChinaSF, a public-private platform that recruits services and investment from China and helps Californian companies do business there.
SOT Darlene Chiu Bryant, Executive Director ChinaSF
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 is San Francisco.
ChinaSF is spearheading the city’s currency hub bid.
Chiu Bryant says California is already China’s biggest U.S. export partner, and a currency hub here would allow companies selling goods to China to be paid in renminbi, which they could then either convert to dollars, or reinvest IN China.
SOT Darlene Chiu Bryant, Executive Director ChinaSF
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 US 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 blue-collar 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 is Managing Director of the China Business Studies Institute at the University of San Francisco.
SOT Stanley Kwong, Managing Director of the China Business Studies Institute, University of San Francisco
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.
The City of San Francisco is said to be working on a formal proposal following talks with officials from Bank of China – hoping to ultimately win the right to clear renminbi transactions.
Rebecca Bowring, San Francisco
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