In its communique, China’s government took a favorable view of the UK’s effort to determine London as the world’s largest center of direct trading between the yuan and pound and allowing Chinese lenders to open wholesale-banking branches in the UK capital. Thus, the UK gives a green-light to Chinese banks on special terms for investors. Such an agreement affords an opportunity to Britain’s capital city to become the prime contender among the rest of the global financial centers competing for yuan trading. Recently, China has exerted every effort to push its national currency on the global stage and to make it a worthy counterpart of the greenback as a heavyweight currency. In this context, London gains an obvious advantage against other powerful states; it is Hong Kong that can meet the competition as it is the only large-scale financial hub outside inland China having such rights. This issue was discussed during the talks while Britain’s Chancellor George Osborne was making a five-day official visit to China. The parties have not disclosed all articles of the agreement so far. However, some sources familiar with the matter report that London investors will have to obtain a license for investing in yuan instruments that are being traded on China’s exchange floors. In addition, China’s regulator is going to supervise how London-based investors exercise their right to buy up to 80 billion yuan ($13.1 billion) of stocks, bonds, and money market instruments. Besides, Chancellor George Osborne announced that visa rules for Chinese nationals coming to Britain are being relaxed in a drive to boost a visitors’ number. This move definitely proves the bilateral importance of the British-Chinese partnership.
