London has this week confirmed its status as the western hub for Chinese investments, with George Osborne announcing the launch of the first renminbi bond.
China is seeking to internationalise its currency and develop offshore ‘dim sum’ markets for the RMB. The offshore bond is the first to be released outside of China and its sovereign territories.
Announcing the launch, Mr. Osborne stated: “This morning we saw the launch of the first RMB bond outside Chinese sovereign territories, and it happened here in London. This builds on the progress the city has already made towards becoming the western hub for RMB investments.”
The volume of RMB deposits in London is already in excess of 109 RMB (£11 billion) with an annual trading volume worth 28 billion RMB (£3 billion). London currently represents 26 per cent of the global offshore market in renminbi, a market which grew more than 80 per cent in 2011, according to the Chancellor.
“It is natural that Chinese banks looking westwards choose London as the hub for RMB in the region, given the city’s pre-eminence as a financial centre and its expertise in foreign exchange markets, bond issuance and other important financial matters..