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Britain eyes China's financial services

(China Daily)

09:16, September 08, 2011

LONDON - Internationalization of the renminbi and the further opening up of China's financial services are hotly anticipated by British business leaders, ahead of the Fourth China-UK Economic and Financial Dialogue (EFD).

"A key issue of interest at this dialogue is the internationalization of the renminbi. I hope that we will see constructive dialogue about a future role for London to develop as a center for renminbi-denominated trade settlement and the trading of renminbi investment instruments," Lord Mayor of the City of London Alderman Michael Bear told China Daily.

The rapid take-off of the offshore market in Hong Kong - and the impressive rise in renminbi deposits in Hong Kong - has made this a widely discussed topic, Bear said.

"I have been encouraged to see participation by UK firms in this area - both underwriting and issuing renminbi bonds in Hong Kong," he added.

His comments come as Vice-Premier Wang Qishan visits the United Kingdom from Sept 7 to 10. Wang will co-chair the Fourth China-UK EFD with UK Chancellor of the Exchequer George Osborne.

At last year's dialogue, China and the UK stressed that the transformation of economic development patterns and structural adjustment was essential to the sustainable development of both economies.

Bear said there have been some important and very positive changes in the renminbi foreign direct investment (FDI) policy.

In this context, constructive discussions at the dialogue on the market conditions and policy drivers which would support the development of a second offshore center in London would be a very positive outcome.

"This is a long-term project, but I hope we will eventually see London developing as a center for offshore renminbi."

Last month, the People's Bank of China and five other financial authorities announced that all parts of the country are allowed to use the renminbi in cross-border trade settlements, a sign of China's intentions to proceed with the internationalization of the yuan.

Guy Dru Drury, chief representative of the Confederation of British Industry (CBI) in China, said that further opening of China's financial services and banking sector to UK business would be welcome.

The CBI is the UK's top business lobbying organization.

"We would of course like to see more insurance, legal, accounting and professional services companies being able to open branches across China," Drury said.

At the same time the CBI would welcome further Chinese investment into the UK, particularly into the City of London, Drury said, adding that it would also be desirable to see sectors such as telecom and energy in China opened up to UK investment.

The Lord Mayor also noted, "I also hope that we will hear some positive news on further Chinese banks setting up a presence in London, to join the growing cluster of Chinese firms now operating as part of London's financial cluster."

Besides these, further strengthening intellectual property rights and improving the business environment in China for foreign firms are big issues for British business leaders.

This would give CBI members even greater opportunities to succeed and develop in China, Drury said.

"I hope that the EFD talks later this week will help to allow our business relationship with China to evolve further - in particular offering the chance for UK to benefit from China's continued economic growth," Drury said.

Katharine Xu contributed to this story.

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