The City of London initiative on London as a centre for renminbi (RMB) business was launched on 18 April 2012. The role of the initiative is to consider practical measures to support the development of London as a centre for RMB business. It aims to:
A quarterly newsletter highlighting RMB developments in London and recent work carried out by the initiative is now available. View the latest RMB update (128kb)
22 February 2013 - Bank of England - People’s Bank of China swap line. Governor Zhou Xiaochuan and Governor Mervyn King have agreed to facilitate discussions on the establishment of a reciprocal 3-year, renminbi (RMB)/sterling currency swap arrangement.
View the Bank of England press release
31 January 2013 – London’s development as a centre for RMB business. The Lord Mayor of the City of London gave the keynote speech at Bloomberg’s ‘Developments in Offshore RMB’ seminar in London.
View a video clip of the speech
5 December 2012 - London has huge potential to become an RMB centre says City of London China Advisory Council. Following the City of London Advisory Council meeting, a public discussion was held with council members Katherine Tsang, Wang Jianxi and Xia Bin. Topics covered included the development of China's international payments system and implications for London’s RMB market, and the development of China’s equities and bond market.
View the press release on London's potential to become an RMB centre
View a clip of the session on London's potential to become an RMB centre
4-5 December 2012 - The City of London Corporation welcomes the successful second meeting of the Hong Kong-London Forum. The City of London Corporation welcomes the successful second meeting of the Hong Kong-London Forum. The second session of the Hong Kong-London Forum was held this week in London, facilitated by HM Treasury and the Hong Kong Monetary Authority (HKMA). Participants in the Forum included City of London initiative members from Bank of China, Barclays, China Construction Bank, Citi, Deutsche Bank, HSBC, ICBC, JP Morgan, RBS and Standard Chartered Bank. Discussion focused on offshore liquidity, payments and RMB products and services.
View the HM Treasury and HKMA joint statement on the Forum
View the City of London press release on the Forum
29 November 2012 - Resource pack: Accessing London RMB products and services. The City of London initiative has launched a resource pack 'Accessing London RMB products and services', which provides corporates and other interested stakeholders with information on RMB products and services in the UK. The packs contain a factsheet on corporate and treasury services, FAQs and industry specific case studies. The full resource pack can be viewed below under the tab entitled 'Resource pack: Accessing London RMB products and services'.
26 October 2012 - UK second largest offshore RMB centre. The UK has become the second largest centre for offshore RMB payments (behind Hong Kong) according to new SWIFT data. In the period July – September, the UK had a 28 per cent share - excluding Hong Kong - (up from 25 per cent in January 2012) with Singapore the third centre with 26 per cent (down from 34 per cent in January 2012).
View the SWIFT white paper 'RMB internationalisation: Perspectives on the future of RMB clearing' (288kb)
10 October 2012 – Defining an RMB centre Mark Boleat, Chairman of the Steering Committee of the City of London initiative has sent a letter to Chatham House on the definitions of an RMB ‘hub’ and ‘centre in’ ‘The connecting dots of China's RMB strategy: London and Hong Kong’.
View the letter defining an RMB centre (393kb)
28 September 2012 - New members of the City of London initiative Three new members have joined the City of London initiative on London as a centre for renminbi business. China Construction Bank, Citi and Industrial and Commercial Bank of China join existing members Bank of China, Barclays, Deutsche Bank, HSBC, JPMorgan, Royal Bank of Scotland and Standard Chartered Bank.
For more information on this work please contact firstname.lastname@example.org.
Current members of the initiative are leading international banks with a strong presence in London and Hong Kong:
- Bank of China
- China Construction Bank
- Deutsche Bank
- Industrial and Commercial Bank of China
- JP Morgan
- The Royal Bank of Scotland
- Standard Chartered
HM Treasury, the Bank of England and the Prudential Regulation Authority are observers to the initiative. The City of London provides the secretariat.
The City of London initiative defines a RMB centre as a location where offshore RMB products and services are offered and a pool of offshore RMB liquidity is held.
London offers a full set of RMB products and services and an RMB liquidity pool. London offers the same product range as Hong Kong, and these RMB products are accessible to non-residents and are actively traded by international banks and financial institutions in London. For example, London accounts for 26 per cent of offshore spot FX transactions. London has developed a pool of RMB liquidity due to its position as a leading international financial centre. London also benefits from its central timezone, which makes it a natural bridge between the Asian and US markets.
A centre is not defined by clearing arrangements: London is indisputably a major centre for the US dollar and the euro, without hosting domestic clearing arrangements for these currencies. Twice as many US dollars are traded in the UK than in the US, and more than twice as many euros are traded in London than in the Eurozone. There is just one pool of offshore RMB (CNH). RMB passes to the offshore pool both via Hong Kong’s infrastructure and by trade settlement directly between mainland Chinese companies and foreign companies. Once RMB is offshore, it can be freely transferred between different offshore locations. Offshore/offshore transactions are also possible between RMB centres such as London, Singapore and Hong Kong.
The UK and Chinese authorities have declared publicly their joint interest in working together to support the international use of the RMB. Chancellor George Osborne and Vice Premier Wang Qishan agreed at the UK – China Economic and Financial Dialogue in September 2011 that “…both sides welcomed the private sector interest in developing the offshore RMB market in London and the growth of the market to date. They agreed to monitor future progress, engaging in bilateral dialogue and dialogue with other authorities, as necessary, to support the market’s future development and address any financial stability risks that may arise.” The City of London initiative aims to “develop and maintain, as appropriate, a private sector dialogue on the international RMB market with regulators in Hong Kong and mainland China to complement that which is already maintained by the UK public sector.” The City of London initiative will continue to cooperate with and interact with the Chinese authorities in Beijing in the development of London as an RMB centre. This complements the annual UK – China Economic and Financial Dialogue.
The City of London initiative has commissioned research to support London’s development as a RMB centre and better understand the needs of users of RMB products and services.
London RMB business volumes January – June 2012
This report, authored by Bourse Consult and published by the City of London, shows that the London RMB market grew significantly in the first six months of 2012 with transaction volumes in foreign exchange and trade services growing strongly. Average daily spot foreign exchange volumes increased by 150% to US1.7 billion reflecting greater liquidity in the pool of offshore RMB.
Trade-related services provided by London banks such as import-export financing and letters of credit also increased strongly. Trade services grew to ¥2.2 billion, a 390% increase compared to the six month average for 2011, and the volume in letters of credit grew 20 times to ¥3.7 billion.
Download London RMB business volumes January – June 2012 (778kb)
Download London RMB business volumes January – June 2012 in Mandarin (987kb)
Corporate and investor perspectives on London renminbi business
This special interest paper, prepared for the City of London by Trusted Sources, examines the attitudes of corporates (non-financial corporations) and institutional investors towards RMB products and services. It examines the views and experiences of European firms using offshore RMB products and services. It shows that these firms welcome the opportunity to make transactions in RMB in the London market, access RMB-related financial services and invest in RMB-denominated assets and highlights the opportunities that the international RMB market offers to companies – for example allowing them to settle transactions, inject capital into their onshore operations and to repatriate their earnings.
Download Corporate and investor perspectives on London renminbi business (1.02mb)
Download the executive summary in Mandarin (106kb)
London: a centre for renminbi business
This report, commissioned by the City of London Corporation and authored by Bourse Consult, presents a picture of the RMB products and services currently available in London and the volume of business transacted in London in 2011. The report demonstrates that a significant amount of RMB business is already being done in London, including services for retail clients, services for corporate clients and interbank and institutional business. These products and services benefit clients by enabling them to conduct international transactions cost-effectively and securely - and allow risk to be hedged and managed.
Download London: a centre for renminbi business (1.1mb)
Download the full report in Mandarin (1.3mb)
Research publications supported by the City of London initiative include:
Europe ready for the renminbi: survey by The Banker
This survey demonstrates that awareness of RMB products and service has spread to corporates and investors across Europe. The survey further confirms London's development as a western centre for international RMB business, with 93% of respondents feeling that London is on course to become the most important European financial centre for international RMB-related activity.
Download the 'Europe ready for the renminbi' report (197kb)
The City of London is supporting the following forthcoming events on the international RMB market:
Emerging Markets FX Trading Summit, London, 21 June 2013
The City of London is pleased to support the Emerging Markets FX Trading Summit. Topics will include: new trading opportunities in the emerging economies – China, India and Russia; liquidity in emerging currency pairs; EM voice broking; algo trading in EM FX; and single-dealer and multi-dealer platforms. For more information or to register, please visit www.fxtraderforum.com
Developments in the offshore RMB market – towards further internationalization Bloomberg has published a white paper looking at developments in the offshore RMB market in key centres including London, Hong Kong and Singapore. View the Bloomberg paper (57.1kb)
Renminbi Compass – The rise of the offshore renminbi FX market
This special extract from the Financial Times monthly research service Renminbi Compass (www.renminbicompass.com) examines the offshore renminbi (CNH) foreign exchange market. This special report takes a closer look at each segment of the CNH FX market and discusses the major hurdles that lie ahead.
View the renminbi compass report (918kb)
SWIFT RMB internationalisation resources
SWIFT’s RMB webpage has information on the RMB internationalisation and how SWIFT can support firms’ RMB development strategies. From this page you can also view SWIFT's latest research reports on the topic. View the SWIFT resources
London’s Infrastructure Needs as a RMB Offshore Centre
Thomson Reuters has produced a white paper discussing the various infrastructural developments that London will need to embrace in order to become a major RMB offshore centre. View the Thomson Reuters paper
Initiative members' resources:
View the Standard Chartered RMB resource webpages
Royal Bank of Scotland
View the CNH market guide (3.31mb)
View the HSBC renminbi resource centre
View a brief guide to offshore RMB (4.2mb)
The Steering Committee guides the work of the City of London initiative. It meets quarterly, chaired by Mark Boleat, Policy Chairman of the City of London.
The Expert Advisory Group meets monthly, and reports to the Steering Committee. It is co-chaired by Richard Jaggard (Regional Head, Transaction Banking - Europe, Standard Chartered Bank) and Paul Gooding (Managing Director, Head of European RMB Business Development, HSBC).
Three workstreams report to the EAG:
• The Clearing & Settlement Infrastructure workstream meets monthly. The C&SI workstream’s objective is to ensure that systems to clear and process RMB meet the needs of the London market. It is led by JP Morgan.
• The Markets, Products & Services workstream meets quarterly. The MP&S workstream’s objectives are to identify current products and capabilities of RMB denominated products and services in London/Europe and what is needed to add to London’s offering as an offshore centre, and undertake outreach to the wider financial services industry on behalf of the initiative. It is co-led by Deutsche Bank and HSBC.
• The Education & Marketing workstream meets monthly/bimonthly. The E&M workstream’s objectives are to develop materials for use by the wider industry and stakeholders on London RMB products and services, and undertake outreach to corporates and investors on London’s offer. It is led by Standard Chartered Bank.