U.K. Chancellor of the Exchequer George Osborne said the nation is in “active” discussions with China to establish a yuan-clearing bank in London and this should be done in “fairly short order.”
“Everyone is committed to the idea in principle so it’s just the practicalities of it,” he said in an interview in Sydney yesterday. “The renminbi market, it’s really expanding rapidly in London and the clearing bank is the next logical step,” he said, referring to another name for the currency.
Osborne told a conference in Hong Kong last week that the U.K will host the first international renminbi conference in the summer, and he confirmed talks to establish a clearing institution for the Chinese currency were being held. The Bank of England said in November it was ready to help set up such a bank, following a government announcement that China and the U.K. will introduce direct trading between the yuan and the British pound.
“It would be an important further milestone both in the development of the renminbi as a currency of the world’s economic future, but also of London and the U.K. as the western center for renminbi trading,” said Osborne, who was in Sydney attending a meeting of Group of 20 finance ministers and central bank governors.
“There’s quite a stark contrast between our export performance with emerging markets,” and the European Union’s, Osborne said. “Our exports to Europe have been very weak and they’ve made up 50 percent of our exports to date” so “we’ve got to redouble our efforts with those emerging economies.”
Along with Prime Minister David Cameron, Osborne has been pushing to expand Britain’s trade with emerging market economies and both led business delegations to China at the end of last year. While Britain’s recovery is gathering strength, Osborne said last week he plans to outline measures to support exports and investment in next month’s budget as the economy remains too unbalanced.
“I want to make sure we do more to attract investment, that’s the new challenge,” he said. “There remain risks out there to that recovery. It’s not secure.”
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