Although China is among the world's leaders in economic growth, few Canadian companies say they use the form of currency when trading with companies from the globe's most-populous nation, a new survey reveals.
Of all the businesses in the industrialized world, Canadian-based companies are the least likely to use the renminbi when engaging in exporting and importing activity with China, according to a recent poll conducted by HSBC. Just 3 percent of Canadian-based enterprises said that they had ever used the Chinese currency, versus about 17 percent of companies from other parts of the world. In 2014, renminbi use, or RMB, was 5 percent in Canada.
For the poll, approximately 1,600 business owners were interviewed among slightly over a dozen countries, including the United States, South Korea, Taiwan, the United Arab Emirates, France, Australia, Qatar, Australia and the United Kingdom.
Despite the infrequency with which Canadian-based companies say they use the RMB when trading with China, nearly two-thirds indicated they intend to engage in more transcontinental trade in the coming year. Approximately 62 percent said that increased cross-border trade was scheduled in the next 12 months, substantially more than the global average, which was 54 percent.
Though RMB use is becoming increasingly common historically speaking, Canada isn't alone when it comes to the relative infrequency with which its been used as of late. The HSBC report noted that usage in Europe and North America has fallen somewhat when compared with 2014 levels. However, the report found that in most European nations, as well as the U.S., companies who operated out of these areas were more likely to utilize the RMB versus those in Canada.
In February, use of the renminbi dropped to nearly 2 percent of overall global payment slips, down from 2.2 percent in December, the Financial Times reported. In the last month of 2014, the Chinese currency was among the top five most used currencies in the world, taking the place of the Canadian dollar, which slipped to the No. 6 spot.
Import activity in Canada at eight-year high
That's not to suggest that importing and exporting activity in Canada has dwindled. In the port of Toronto, for example, roughly 2 million tons of cargo emanating from several different parts of the world reached Canada's shoreline, based on data from PortsToronto. The last time Toronto saw 2 million tons or more in imports in a 12-year period was 2007.
With this amount of goods, hundreds of ships visited Toronto's port locations carrying cargo for offloading. PortsToronto noted that more than 160 ships reached Canada's southern coast.
Geoffrey Wilson, PortsToronto CEO indicated that virtually every product you can think of came to Canada by ship.
"From the salt used on our roads to keep drivers safe to the concrete used in Toronto's booming construction industry, the goods delivered through Toronto's Port have a significant impact on the people, projects, and industries of Toronto," said Wilson in a press release.
Though trucking is the main means through which tonnage is carried in North America – in the U.S., 69 percent of domestic transportation tonnage is moved by commercial vehicles, according to the American Trucking Associations – port shipments helped avoid traffic tie-ups. In 2014, the roads were spared of 50,000 40-ton trucks carrying cargo, thanks to the shipments handled at PortsToronto, formerly known as Toronto Port Authority.
This mode of transportation is also more efficient. A ship carrying 1 ton of cargo can travel 149 miles on one liter of fuel. Meanwhile, commercial trucks carrying the same amount can only go 18 miles before needing to fill up again.