London has cemented its role as a leading offshore hub for China’s yuan, according to a new financial cooperation agreement that also aims to ease the cross-listing of firms in each other’s markets.
The deal emerged from the first meeting of the UK-China Financial Working Group, which convened in Beijing on Saturday. The meeting coincided with the final day of British Prime Minister Keir Starmer’s state visit.
The meeting’s outcome and a joint statement were not made public until Friday.
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“The potential that stems from the deepening of the UK’s financial services relationship with China is huge,” said the United Kingdom’s economic secretary to the Treasury, Lucy Rigby, in a separate British statement.
The meeting was co-chaired by Rigby and China’s central bank governor, Pan Gongsheng, in the presence of senior officials from both sides.
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Beijing recognised London’s role as a “leading offshore hub” for yuan trading and as one of the “largest, most vibrant and innovative” offshore yuan markets, according to the joint statement. Such offshore hubs are financial centres where the yuan can be freely traded and used for investments, facilitating its global use, or internationalisation.
The Chinese side vowed to support UK-based Chinese financial institutions in developing new yuan-denominated financial products. Last Friday, the London branch of the Bank of China, one of the nation’s four largest state-owned banks, was designated as the second “yuan clearing bank” in the UK. Such banks process yuan transactions outside mainland China, acting as a crucial intermediary for international yuan flows.
