Britain and China agreed Thursday to work together to develop a yuan offshore market in London, the British government announced.
"We discussed the strong private-sector interest in developing the offshore RMB (renminbi/yuan) market in London," British finance minister George Osborne said after talks with Chinese Vice Premier Wang Qishan in London."We will work together to support the market's further development. In particular, we agreed to collaborate on the development of RMB-denominated financial products and services in London and our regulators stand ready to support this growing market," Osborne said.
Britain hopes the agreement will boost London's position as Europe's predominant financial centre by harnessing the growing power of the Chinese currency.
China, the world's second largest economy, is gradually relaxing the rules on the use of the yuan in the hope that it will become a key international reserve currency.
British companies agreed £1.4 billion (1.6 billion euros, $2.25 billion) of trade deals when Premier Wen Jiabao visited in June, but Britain has largely lost out to European rivals France and Germany in the battle for contracts with China.