HONG KONG (AP) — British and Hong Kong leaders said Monday they will team up to develop London into an international trading center for China's currency.
British Treasury chief George Osborne said in Hong Kong that his trip to Asia this week, which also includes stops in Beijing and Tokyo, furthers dialogue with Chinese authorities and Chinese and British banks "on establishing London as a new hub for the renminbi market as a complement to Hong Kong."
Hong Kong's leader, Chief Executive Donald Tsang said a new private sector-led group will be set up to look at strengthening ties between Hong Kong and London in terms of settlement systems, market liquidity and the development of renminbi financial products.
Beijing is promoting the international use of the renminbi, also known as the yuan. It's also promoting Hong Kong, a semiautonomous Chinese territory with its own financial system and currency, as an offshore trading center for the yuan.
Last year, yuan-denominated bank deposits in Hong Kong doubled to 630 billion renminbi ($100 billion) as savers sought higher returns from the yuan, which has been strengthening 4-5 percent a year.
Beijing would like to see the currency become an alternative to the dollar, although tight capital controls limit its circulation overseas.
"It's clear that there's scope for substantial expansion of the renminbi market in coming years," said Osborne, who was speaking at a financial conference.
He said that in June 2011, China's share of world trade was 11 percent but the yuan's share of global foreign exchange trading last year was only 0.9 percent.