London looks to become yuan trading centre
Published: 17 Jan at 11 AM
London is aspiring to be the leading international centre for the trading of the Chinese currency the yuan, AKA the renminbi, according to an announcement from the UK Treasury. George Osborne, Britain’s Chancellor, said England’s capital city is in the perfect position to act as a gateway between investment in Europe and Asian banking.
The news has been welcomed by bankers who say it could inject billions into the City economy. In recent years, China has gradually begun to relax its stringent controls on capital flows and the value of its currency.
In the start of a visit to Asia, the Chancellor touched down in Hong Kong for talks yesterday. He is on a mission to establish London as the yuan’s new hub, and claims it will compliment Hong Kong. He said that the developing market is “exciting” and that, as the largest centre for foreign exchange in the world, London is best placed to assist.
Such a partnership will put London ahead of those looking to become a major international trading centre for the yuan, according to the Treasury. Last summer, an intergovernmental agreement between Hong Kong and London concluded that the two nations would work together on the trading of the Chinese currency.
As China has the world’s second largest economy, the relaxation of the previously stringent state controls will make the currency a major globally-traded player. According to a study by Chatham House, around a trillion dollars of trade transactions are likely to be settled in the currency by 2020.