Renminbi use among Australian companies has grown since 2014 and is set to accelerate further, according to global research by HSBC. Australia was the only market surveyed to see a pick-up in renminbi adoption during the period.

The 2015 HSBC RMB Internationalization Study was conducted to understand companies' attitudes towards business activity with China as well as current and future use of the Chinese currency. On behalf of HSBC, Nielsen surveyed more than 1,600 international companies currently transacting with China across 14 markets.

HSBC's research found that currently 13% of Australian companies are using renminbi for cross-border business, compared to only 9% in 2014.

Australia's renminbi adoption is catching up with renminbi heavyweights Singapore (15%) and Korea (15%), yet unsurprisingly trailing mainland China and Hong Kong.

James Hogan, head of commercial banking for HSBC in Australia said: "After announcing a milestone Free Trade Agreement with China and being appointed an offshore renminbi clearing centre in November 2014, it's no surprise that Australian companies are waking-up to the importance of incorporating renminbi within their broader China strategy."

Australia's renminbi use is higher than all surveyed markets outside of Asia including the UK (10%), France (10%), and Germany (7%) - all of which experienced a noticeable decline in renminbi cross- border activity compared to 2014.

The research shows that Australia's future renminbi prospects are strong, with 20% of current non- users planning to settle cross-border business in renminbi in the next three years.

Non-users say the most compelling reasons to consider using renminbi in future include reducing FX risks or costs, requests from trading counterparts, and cheaper or more competitive pricing.

Hogan said: "Australian businesses have historically viewed using renminbi as an opportunity to gain first mover advantage, but companies are now adjusting to the idea that renminbi is an increasingly mature currency. Chinese companies look favourably on foreign partners using their currency, as it reinforces commitment to China," he said.

In fact, the survey shows the majority of corporates in Greater China, and current renminbi users, believe foreign companies that transact in renminbi are likely to experience financial and relationship advantages.



Despite the increase in renminbi use in Australia and the related advantages, more education for non- renminbi users in Australia is required as 68% of non-RMB users in Australia fail to see a clear benefit in using renminbi for settling cross-border business with China.

And according to the survey, 40% of Australian non-renminbi users have not yet considered using the currency for cross-border business with China.

Hogan concluded: "The scale and influence of the renminbi continues to grow. HSBC's latest forecast indicates renminbi trade settlement is set to top 50% of China's total trade in 2020."

"To continue accessing these business and investment opportunities with China, Australian businesses need to be renminbi-ready. While progress has been made, Australian businesses cannot remain complacent."