Post date: Jan 16, 2012 2:9:24 PM
British Finance Minister George Osborne says Britain is teaming up with Hong Kong to secure London a top spot as an offshore trading centre for the Chinese currency, as the UK aims to boost trade and investment ties with fast-growing Asian markets.
HONG KONG, CHINA (JANUARY 16, 2012) (ATV) - Britain is teaming up with Hong Kong to secure London a top spot as an offshore trading centre for the Chinese currency, as the UK aims to boost trade and investment ties with fast-growing Asian markets.
In a speech at the Asia Financial Forum on Monday (January 16), Britain's Finance Minister George Osborne also urged countries to fight projectionist tendencies and repeated Britain's willingness to add further funding to the International Monetary Fund (IMF).
Britain's Finance Ministry and the Hong Kong Monetary Authority (HKMA) would facilitate a private-sector forum to explore synergies, specifically looking at clearing and settlement systems, market liquidity and the development of new products denominated in yuan.
Britain won the Chinese government's backing for London to become an offshore trading centre for the yuan last year.
"And here is the potential for a new and fruitful partnership that would bring benefits to the people of China, the people of Hong Kong and the people of Britain. Last September at the UK-China Economic Financial Dialogue, I agreed with (Chinese) Vice Premiere Wang that both sides welcomed the private sector interests in developing the offshore RMB market in London. And we agreed to engage in bilateral dialogue with other authorities if necessary so support the markets future development," Osborne said.
"My visit this week furthers that dialogue with the Chinese authorities together with Chinese and British banks on establishing London as a new hub for the RMB market as a complement to Hong Kong," he added.
Osborne welcomed a recent announcement by the HKMA that it will significantly extend the operating hours of its yuan payments systems to better accommodate European transactions, making it easier for transactions in London to be settled.
He said London is poised to be Asia's gateway to the West.
"In June last year RMB had a world foreign exchange market share of just 0.9 percent. This compares to China's share of the world's trade of 11 percent and I think London is perfectly placed to act as a gateway for Asian banking and investment in Europe and a bridge to the United States," he said.
Speaking only days after ratings agency Standard & Poor's downgraded a number of euro zone countries including France, Osborne applauded progress made by the euro area though he urged further actions to restore sustainable finances and growth.
"But of course there remains more to do as the euro area itself acknowledges. No one likes to see credit ratings downgraded. But what matters more are the actions which countries take to restore their own fiscal sustainability and take the structural reforms necessary to ensure productive, competitive economies," he said.
Britain is close to recession again as the government's tough spending cuts aimed at erasing the huge budget deficit bite and the crisis in the euro zone - its main trading partner - weighs on exports and business confidence.