First UK-China Financial Forum held in London
18 Jun 2014 04:22 PM
Chancellor hosts Premier
Li Keqiang at first Financial Forum between the two
countries.
The Chancellor of the Exchequer
has today (Wednesday 18 June) announced a significant next step in the UK
becoming the offshore centre for the Chinese currency and investment, as he
hosted Premier Li Keqiang and other senior policy makers from Britain and China
at the first Financial Forum to be held between the two
countries.
Read the
Chancellor’s speech at the Financial Forum in full.
First announced by the
Chancellor during his visit to Hong Kong earlier this year, the Forum is
dedicated to discussing the opportunities that China’s increasing
economic and financial importance presents to both countries to generate jobs
and growth, in particular through the internationalisation of China’s
currency, the renminbi (RMB).
The Financial Forum saw the
announcement of a series of measures designed to deepen economic and financial
co-operation between Britain and China including:
- direct trading between the
British and Chinese currencies for the first time. This is an important step in
strengthening economic and financial ties between the UK and China by
facilitating the formation of a bilateral exchange rate, lowering transaction
costs and promoting the use of RMB and sterling in bilateral trade and
investment
- granting further licences to
British firms to enable them to invest directly into Chinese markets. Blackrock
and HSBC Global have been granted RMB Qualified Foreign Institutional Investors
(RQFII) status by the China Securities Regulatory Commission (CSRC), which
builds on the agreement by the Chancellor and Vice Premier Ma Kai at the
UK-China Economic and Financial Dialogue in October 2013, where the UK secured
a RMB 80bn RQFII quota
- approving Renminbi dominated
loan guarantees by the government’s export credit agency, UK Export
Finance (UKEF), which could lead to the first Renminbi transaction supported by
UKEF. This will help to support British exporters compete for and win new
business in China
The Chancellor also welcomed the
announcement earlier in the day that China Construction Bank (CCB) has been
appointed as the first
official RMB clearing bank outside Asia, in London. This is an important
step which reinforces Britain’s position as the western hub for Chinese
finance.
From almost no offshore RMB
activity in London in 2011, by the end of 2013 SWIFT data showed that London
accounted for almost two-thirds of RMB trading outside of Mainland China and
Hong Kong.
The latest data also shows that
London accounts for 57% of all RMB-denominated SWIFT payments between Europe
and Mainland China and Hong Kong. And Standard Chartered’s RMB
Globalisation Index, which puts London as the most important offshore RMB
centre after Hong Kong, concludes that payments through London are now
comparable to levels seen earlier last year in Hong Kong.
The UK-China Financial Forum was
attended by senior British and Chinese decision and policy makers including the
Chancellor, Premier Li, Governor Zhou of the People’s Bank of China, Sir
Charlie Bean, Deputy Governor of the Bank of England, and the Chairmen and
Chief Executives of Britain and China’s largest global
banks.
The Chancellor
said:
Let me be clear. Our long term
economic plan is working, but the job isn’t done. We need to export to
fast growing economies like China, and attract more investment to our
shores.
To do that we need to make sure
China’s currency, as it emerges onto the world stage, is used and traded
here – as that will not only be good for China, but good for UK jobs and
investment too.