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An employee counts Renminbi banknotes at a Bank of China branch in Hefei, Anhui province.STRINGER SHANGHAI/Reuters

Despite steadily increasing trade with China, Canadian businesses were the least likely to have settled transactions using the Chinese currency of 11 markets surveyed in new research from HSBC Holdings PLC.

In a survey that included U.S., British, French, German, Australian, Taiwanese and Hong Kong-based businesses, oOnly 5 per cent of Canadian companies reported that they had done cross-border business using the Chinese yuan, or renminbi. By comparison, 22 per cent of global companies had done business using the yuan, and 17 per cent of U.S. businesses said they had made transactions using the currency.

More than half the Chinese businesses surveyed said they would offer discounts of as much as 5 per cent to firms willing to pay using their local currency.

China is Canada's second-largest trading partner, after the U.S.

Ben Arber, HSBC Canada's head of global trade and receivables finance, said Canadian retailers and manufacturers, by not embracing the yuan, were missing opportunities to reduce their costs and potentially win more contracts in mainland China.

"You're going to get a better deal," if you offer to let Chinese suppliers pay you in renminbi, Mr. Arber said. At the same time, he added, "for Canadian companies bidding on those contracts, offering to get paid in renminbi might sweeten the deal."

The research comes as Canada attempts to land the first offshore renminbi settlement centre in North America for either Vancouver or Toronto. That would allow businesses and tourists to make local transactions in the Chinese yuan without first converting the currency into U.S. dollars, helping to reduce foreign exchange costs while also boosting trade between Canadian and Chinese businesses.

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