British finance minister in Beijing for yuan talks

British finance minister George Osborne holds talks with Chinese officials yesterday in a bid to attract investment in British infrastructure and make London a key trading hub for the yuan.
He is in Beijing after a brief visit to Hong Kong, where Osborne announced Britain had agreed to partner with the Chinese territory to develop the City of London as a major offshore centre of trade in China’s currency.
Osborne will meet with Vice Premier Wang Qishan, China’s top finance official, today, as well as the heads of the nation’s sovereign wealth fund China Investment Corporation and ICBC – the largest bank in the world.
The Chancellor of the Exchequer met with Zhou Xiaochuan, governor of China’s central bank, on Monday evening, according to a British embassy spokesman.
Hong Kong is currently the world’s only officially designated offshore yuan trading centre, but Britain is keen to make London – the heart of European banking – the second such market.
China and Britain agreed in September to work towards this goal, and Osborne on Monday announced the launch of a joint private-sector forum to support Beijing’s efforts to develop the offshore market for the yuan.
The new London-Hong Kong Forum will examine ways the pair can streamline clearing and settlement systems, boost market liquidity and develop new yuan-denominated products.
While in Beijing, Osborne will also seek to promote opportunities in British infrastructure projects in a bid to attract Chinese investment, according to British embassy officials.
As part of plans unveiled in November to boost the British economy, Osborne identified more than 500 infrastructure projects that the government wants to see built over the next decade and beyond.
These include roads, railways, airport capacity, power stations, waste facilities and broadband networks.
To date, none of China’s state-owned enterprises have made significant investments in Britain, but Hong Kong tycoon Li Ka-shing last year bought utility firm Northumbrian Water for USD 3.9 billion.