The UK Government website has published the text of a recent address given by Caroline Wilson, the Consul General to Hong Kong. Ms Wilson’s address was given to the London Stock Exchange’s Greater China Forum on the topic of London as a renminbi (RMB) offshore centre.
2013 was a landmark year for the London RMB market in that:
- a currency swap agreement was put in place between the central banks of the UK and China. The UK was the first G7 country to do so;
- following in Hong Kong’s footsteps the UK became the first country beyond Greater China to receive an RMB qualified foreign institutional investor scheme quota, allowing UK firms to invest RMB directly in Chinese financial markets;
- Chinese banks for the first time could apply to set up wholesale branches in the UK; and
- China and the UK agreed to support RMB clearing and settlement arrangements in London, and it is expected that a clearing bank will be appointed soon.
Ms Wilson explains that the RMB is a priority area for the UK Government. The UK will be looking to build further on last year its advances at the next Economic and Financial Dialogue with China, which is due to be held during the autumn in London.
According to Ms Wilson almost two thirds of all RMB payments outside of China and Hong Kong now take place in London. London’s share of the global RMB market has jumped from 9 per cent at the end of 2012 to 15 per cent by April 2014. Given the pace of growth in the RMB market overall, this means the volume of RMB activity taking place in London grew by around 150 per cent during 2013.
View Consul General to Hong Kong addresses LSE Greater China Forum, 11 June 2014