London signs slew of deals to foster renminbi trading
THE LONDON Stock Exchange (LSE) yesterday inked agreements with two of China’s biggest banks to give businesses in China greater access to UK capital markets.
The group said it had signed memorandums of understanding with Agricultural Bank of China and the Bank of China to boost London’s role as a hub for the burgeoning offshore renminbi market.
The move is designed to put London in pole position to reap China’s increasing integration into the global financial system and coincides with the first state visit by new Chinese Premier Li Keqiang.
The exchange will work with the Agricultural Bank of China to develop renminbi denominated equity and debt products, such as exchange traded funds and so-called dim sum bonds, which are issued in the Chinese currency.
The agreement with the Bank of China is set to put the lender on course to become a member of the London Stock Exchange (LSE) and LCH.Clearnet, LSE’s clearing house, helping to foster new renminbi products in London.
“The innovations which will result from the partnership will provide issuers and investors alike with unparalleled cross border access to the Chinese and UK markets,” Bank of China chairman Tian Guoli said.
The agreement came amid a slew of deals announced between British and Chinese firms.
The UK also signed a deal with the China Development Bank Corporation to help it lend in the UK and boost co-operation in renminbi trading.
Lloyds Banking Group also struck a deal with the bank to help push more Chinese investment in UK infrastructure.
The government said £14bn worth of deals had been signed, although most of this – 85 per cent – came from the £12bn agreement between BP and China National Offshore Oil Company.
China Minsheng Investment Corpor-ation also said it would open an office in London.