Renminbi is 'top priority' for London's Lord Mayor

Updated: 2014-03-11 09:15

By Cecily Liu (

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Supporting the renminbi's internationalization is one of the United Kingdom government's top priorities, City of London Lord Mayor Fiona Woolf said.

"As a leading international center providing a full range of trade and foreign exchange services to global corporate and institutions, it is natural that London should be intimately involved in the development of RMB markets," Woolf said at a half-day renminbi forum held by the Agricultural Bank of China (ABC) in London on Monday.

Topics discussed included China's economic outlook, cross-border use of the renminbi, foreign investors' accessing of China's interbank bond market and the development of the Renminbi Qualified Foreign Institutional Investor (RQFII) scheme.

London's efforts to support renminbi internationalization began in September 2011, when China's then Vice-Premier Wang Qishan welcomed London's private-sector-led initiative to develop offshore use of renminbi.

The quantity of renminbi activities in London has grown rapidly over the past few years, especially in trade finance and foreign exchange, Woolf said.

Trade finance transactions using renminbi in London totaled 27.94 billion yuan ($4.61 billion) in the first half of 2013, up from 13.8 billion yuan a year earlier. Daily average trading volume of renminbi-related foreign exchange products expanded to $22.3 billion, up from $11.6 billion, according to official statistics.

Woolf believes renminbi's international usage will continue to increase, driven by China's strong cross-border trade flows.

"In terms of trade, China is, excluding the Americas, the top trading partner of most key markets including the US, European Union and India. It is natural that China's currency matches its international economic and trade significance," she said.

She said London should fully engage with the opportunities associated with renminbi's internationalization, as its advantages in the financial services industry put it in a good position to realize such an ambition.

These advantages include the city's strength in product development, its regulatory structure and framework and the depth and breadth of its financial markets, in particular its foreign exchange markets, she said.

More importantly, London's role in supporting renminbi internationalization has strong government support. "There is the will to carry this out," she said.

She said that 2014 has made a good start for London's renminbi activities, as the International Finance Corporation issued a renminbi bond in London last week and Ashmore Group became the first London-based entity to gain a RQFII license to enter China's domestic securities market earlier this year.

"Both these developments signal that not only London's renminbi trade volumes will continue to rise steadily, but more and more European investors are attracted to renminbi opportunities," she said.

Woolf also highlighted the strong relationship between the City of London and ABC's London subsidiary, which opened in 2012.

A key milestone for ABC in supporting London's development of renminbi activities is the establishment of a renminbi clearing service in partnership with Standard Chartered.

The benefits of the facility include same-day clearing for London transactions, the ability to clear transactions without being affected by Chinese public holidays and clearing under the laws of the UK.