The U.K. and Hong Kong announced a deal Monday to jointly develop the offshore market for China�s currency.
The U.K.�s Chancellor of the Exchequer George Osborne said his visit to the region furthers the continuing dialogue of �establishing London as a new hub for the RMB market, as a compliment to Hong Kong.� He was speaking on the first day of the Asian Financial Forum, before traveling to Beijing and Tokyo.
The finance minister said London is well placed to act as a gateway for Asian banking and investment for Europe and a bridge to the United States.
The joint private-sector forum introduced today will specifically be looking into clearing and settlement systems, market liquidity and the development of new yuan-denominated products. Osborne said it marks another step toward greater capital convertibility.
Hong Kong has been used as a testing ground by China�s central government, as it continues to gradually internationalize its currency. Beijing�s motive is to reduce its dependence on the U.S. dollar as the reserve currency for global trade.
Cross-border trade settled in yuan rose to 2.08 trillion yuan last year, while direct investment settled in yuan came to 110.9 billion yuan, according to the People�s Bank of China.
U.K. Chancellor of the Exchequer George Osborne talks with Li Ka-shing, Greater China's richest man with a net worth of $22 billion.
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