Britain’s Chancellor, George Osborne, made an important announcement from Beijing on Monday at the end of high-level talks with Chinese leaders China’s central bank. In an unprecedented move, the People’s Bank of China will be allowed to start issuing short-term debt in London. Osborne stated that these renminbi bonds in London would “cement” the capital’s position as “China’s bridge into Western financial markets”.
The UK-China Economic and Financial Dialogue resulted in a total of 53 agreements, which shows Mr Osborne’s passion for China. He alleged that “I have strongly supported China’s efforts to increase the international use of the reminbi,” adding that “and make no doubt about it, I want the UK to be the natural Western hub for renminbi trading.” The announcement has come after the UK government was allowed to issue sovereign renminbi bond last October. According to the Treasury, the PBoC will begin issuing debt denominated in China’s currency “in the near future.”
In his remarks, Mr. Osborne highlighted that “this is a major step in developing this market infrastructure. I believe it cements London as the pre-eminent location for RMB trading and Chinese investment in the West.” The news has come after China’s premier, Li Keqiang, recently retold that there was no basis for continued yuan depreciation, a month after the PBoC devalued the currency for the first time in modern history. He stated that “we will actively nurture capital markets that are open, transparent and stable in the long term.”
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