The chancellor unveiled the plans in Hong Kong on the first day of a three-day Asia visit, which will also take him to Beijing and Tokyo. In a statement, he noted that London was “perfectly placed to act as a gateway for Asian banking an investment in Europe”.
As of June, the renminbi, which began trading outside of China only recently, already had a 0.9% share of the world foreign exchange market, Osborne observed, adding: “We are by some distance the world’s largest foreign exchange market; and the growing use of RMB in…global markets will bring substantial benefit to Chinese economic development and the wider world economy.”
In his statement, which was the basis for a speech to the Asia Financial Forum, Osborne said he welcomed Hong Kong’s decision to extend the hours of its RMB trading period to facilitate London-based traders.
“Our objective is simple: We want to expand the amount of business and trade we do with each other, so that the citizens of China, Hong Kong and Britain all benefit from the prosperity and jobs that will bring,” Osborne said.
According to Hong Kong Monetary Authority data, RMB-denominated deposits in Hong Kong grew to RMB627bn ($99 billion) in November from RMB64bn in January 2010.
Reserve currency
The UK government’s plans to make the City of London a major renminbi trading centre are the latest in a series of developments that signal the currency’s growing popularity. As reported, institutions ranging from HSBC to Alliance Bernstein to Bank of America Merrill Lynch have jumped on the renminbi bandwagon in the past year. One of the landmark developments occurred in 2010, when Standard Chartered, the UK-based, Asia-focused bank launched the first-ever renminbi-denominated corporate bond, for McDonald’s.
To read the chancellor’s speech, click here.
