London gets its first renminbi clearing bank

BRITISH businesses and traders will get more access to Chinese markets after the China Construction Bank (CCB) was yesterday appointed the UK’s first renminbi (RMB) clearing bank.

The Bank of England signed the deal with CCB, meaning that firms in Britain would be able to clear currency trades through a bank in the UK.

It is a particularly important step for the City, as London is trying to build on its position as the biggest RMB trading hub outside China and Hong Kong.

The capital already dominated the global forex markets, and chancellor George Osborne said he did not want to miss out on the growth of the RMB’s significance.

The appointment is “another major step forward for the UK as the western hub of Chinese finance”, he said.

The decision was backed by Bank of England governor Mark Carney.

“The announcement represents another important milestone on the progress towards greater cross-border use of the RMB,” he said. “As the official clearing bank, CCB will play a valuable role in facilitating greater use of the RMB for trade, investment and other economic activities in the UK, particularly by providing a further option for UK firms to clear and settle their RMB activity within the London market.”

Meanwhile, Chinese premier Li Keqiang said the country’s economy would not slow rapidly. “There have been some discussions saying that the Chinese economy is slowing down, they are worried whether the Chinese economy will head to a hard landing,” he said. ”Here I will be very frank and I will also make this point very solemnly: this will not happen.”