Britain, Hong Kong to Develop London as Yuan Trading Hub

Posted January 16th, 2012 at 4:40 am (UTC-5)
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Britain says it is partnering with Hong Kong to develop London as an international trading center for China’s currency.

British Finance Minister George Osborne told a a meeting of Asian finance officials and executives in Hong Kong Monday the joint venture is designed to establish London as a “new hub” for the yuan.

“It reflects London’s strength in product development, its regulatory structure and the depth, breadth and international reach of our financial markets. We are by some distance the world’s largest foreign exchange market, and the growing use of the RMB (yuan) in these global markets will bring substantial benefit to Chinese economic development and the wider world economy.”

Osborne also welcomed Hong Kong’s decision to extend the operating hours of its yuan settlement system to accommodate European transactions.

China and Britain agreed in September to work together to develop London as a yuan trading market. Beijing would also like to see the yuan become an alternative to the dollar.

The newly established London-Hong Kong forum will examine ways to streamline settlement systems, boost market liquidity and develop new yuan-denominated products. Banks in the forum include HSBC Holdings, Standard Chartered, Barclay’s and Bank of China, among others.