Britain to issue first yuan offshore bond this year
London looking to boost quest to become the centre of offshore trade in renminbi
Britain will become the first Western government to issue an offshore bond in China's currency, finance minister George Osborne has said. The move marks a deepening of London's efforts to build financial links with the world's second-largest economy.
News of the issue on Friday came after Britain announced £2.4 billion (HK$30.2 billion) of commercial deals with China, coinciding with Vice-Premier Ma Kai's visit to London.
"I can now announce that the UK government intends to be the first national government outside of China to issue a bond in China's currency," said Osborne, speaking alongside the vice-premier as part of an annual meeting on finance and investment involving the two countries.
"We have issued bonds in US dollars before. Now we will issue a bond in renminbi."
Osborne also said the Lloyd's of London insurance market had been granted a licence to open a branch in Beijing, days after Britain granted the Industrial and Commercial Bank of China a wholesale banking licence.
Osborne said the bond would be similar in size to a 2 billion yuan (HK$2.52 billion) bond issued in London by China Development Bank.
The finance ministry said it expected the bond to be issued this year and that it would be used to finance the government's reserves of foreign currency.
Britain has been keen to attract Chinese banks and offshore trade in the yuan to bolster its position as the world's main centre for foreign exchange trading.
In March, Britain and China signed an agreement to set up a clearing service for yuan trading in London, which is competing with Luxembourg, New York, Paris and Frankfurt to become the top Western offshore yuan centre.
