A working group has been set up by Paris EUROPLACE, gathering the representatives of the leading French and Chinese banks in Paris, with the support of the Banque de France and the French Treasury, to define a comprehensive and precise strategy.
According to Arnaud de BRESSON, CEO, Paris EUROPLACE, “Paris is already an active RMB player:
• Nearly 10% of the Sino-French trade is already settled in RMB, with further room for growth. And China is the 3rd destination for French exports, and the 2nd foreign supplier to France.
• The amount of RMB deposits in Paris adds ups to RMB 10bn. Hence France is the second largest RMB deposit base in Europe.
• The French corporates are among the major European issuers of RMB-denominated bonds, with RMB 7bn issued in 2011/2012, on par with German corporates, and twice the size of British issues.”
The 2012 Paris EUROPLACE survey on the French corporates’ needs in RMB financial services indicates that roughly 50% of the major French corporates are already involved in one way or another in RMB business. Trade settlement is by far the main channel through which these companies are dealing with the Chinese currency. Most of these companies hold an offshore account in Paris and/or Hong Kong. Corporates, including SMEs, are asking for more information on the Chinese regulation and the RMB financial services offer.
In this context, the Paris financial centre has decided 3 main priorities, consistent with China’s agenda:
• To strengthen and widen financial services to support French and European corporates, including SMEs, in order to mitigate forex risks and costs, and enhance their financing opportunities,
• To develop an efficient offshore RMB liquidity pool in Paris fully able to retain and recycle trade related RMB flows, including the transactions executed by Paris-based banks involved in trade and investment flows between China and Africa ,
• To offer the best liquidity to international banks active on the RMB market in Europe at any time of the day, as a supplement to Hong Kong trading hours, given the time zone difference between the two locations.
Paris EUROPLACE will conduct a series of concrete actions:
• To widen corporates, including SMEs, understanding of the opportunities offered by the RMB internationalisation, and to contribute to a better understanding of the RMB rules and practices,
• To promote the existing French and Chinese banks offers to French and European corporates and investors,
• To reinforce the mobilization of French and European market players and Market authorities to facilitate the development of the RMB internationalisation.
Paris EUROPLACE has released today in Hong Kong a document summarizing Paris contribution to the RMB trade settlement scheme and its roadmap, covering the range of its RMB financial services offer, the relationships between French issuers and the RMB debt capital markets, and the links between Paris and the new emerging RMB financial centres.
John TSANG, Financial Secretary of the HKSAR, has underlined that “the question is not if Renminbi will become a reserve currency or not but when.”
Christian NOYER, Governor of Banque of France expressed that “Paris is keen on developing an offshore RMB market. The Paris financial centre has always been an innovative place with a strong and internationalised banking sector. It presents today numerous strengths to become the main offshore RMB within the Eurozone. The French banks are some of the most active in Asia by far. On top of that, many French corporations have already demonstrated a keen interest in the RMB offshore market, both for financing and settling their trade with China and for optimizing their cost of financing and investing in China”
Concerning the Euro zone situation, Christian NOYER, Governor, Banque of France, has underlined: “Today, the euro area is advancing with determination in the right direction. Its governments are making fiscal, structural, financial and institutional reforms that will ensure the future stability and growth of the euro area. The Eurosystem’s monetary policy is a source of immediate confidence and stability. Our determination is total and our efforts must be continued relentlessly.”
Arnaud de BRESSON, CEO, Paris EUROPLACE has stressed that “as a consequence, €urozone and France are today considered as attractive investment areas, offering the best investments opportunities to international investors, both for equities and credits.”
For institutional investors looking for greater diversification, European and French equity market offer a large and very diversified pool of growing companies. 34 French listed companies, in the Global Fortune index 500, are worldwide leader in their sector, with a strong presence in the fast growing emerging markets.
French equity market is still under-priced compared to international standards and offers the highest liquidity pool in the Eurozone and a wide range of signatures, notably SMEs, with high potential of growth.
The Paris euro-denominated bond market is the leading market in Europe with 35% of market issues, ahead of London (27%) and Germany (10%).
The French asset management industry is the 2nd largest of the world. It benefits from the new UCITS IV directive, which facilitates cross border investments and organizes a greater flexibility.
The French private equity ranks 2nd in Europe. In this domain, the objective is to stimulate investment and business partnerships between French and Chinese SMEs and investors, in high tech, software and IT services, electronic, media, bio technologies…
Paris EUROPLACE is an open international financial center, with a strong presence of international investors, holding more than 40% of the Paris CAC 40 market capitalisation and 65% of the French government debt.