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London in HK link-up to trade in yuan

Enoch Yiu South China Morning Post 01/17/2012 19:22
London in HK link-up to trade in yuan - Business

Hong Kong will help London develop as the next offshore yuan trading centre, shrugging off traditional competition between the two cities as part of a broader plan to boost international usage of the currency.

The tie-up with the City of London, including extensions of currency trading hours, is the first such agreement with another financial centre and signals Hong Kong's intention to deepen its involvement in building the yuan into a truly global currency.

Britain's finance minister, Chancellor of the Exchequer George Osborne, played down suggestions the move would hurt Hong Kong as a leading offshore yuan trading centre. Osborne told a Hong Kong government seminar yesterday that the plan was to "establish London as a new hub for the renminbi market as a complement to Hong Kong".

Osborne will meet Vice-Premier Wang Qishan in Beijing to discuss details about how London will develop as a yuan trading centre and tap business in Asia. Britain, which was hard hit by the global financial crisis, saw its exports to China surge 20 per cent last year.

"We have got to do more if we are to be the home of Asian investment in Europe. The British government needs to roll up its sleeves and make it happen," Osborne said, adding that he wanted more Asian trade and tourists in Britain.

The chief executive of the Hong Kong Monetary Authority, Norman Chan Tak-lam, said that by establishing appropriate links with Hong Kong's offshore yuan platform, banks in different parts of the world would be able to provide a comprehensive range of yuan banking and financial services to meet the rapidly increasing demand of customers.