Britain has announced London will become an offshore center for the Chinese currency. It will be able to handle investments in the Asian nation's tightly controlled yuan, thus stealing a march on Frankfurt and Paris.
During a visit to Beijing on Tuesday, British Chancellor of the Exchequer George Osborne said China had agreed to make London a center for handling investments in the yuan.
He noted that market players in London would be able to apply for licenses to invest directly into China. Osborne added the Chinese central bank had set an initial quota for London of 80 billion yuan ($12.7 billion, 9.37 billion euros).
The finance minister also announced that state-owned Chinese banks would be allowed to expand their activities in Britain.
Ahead of the curve
"My ambition is to make sure London is the western hub for yuan business," Osborne said in a statement. "More trade and more investment means more business and more jobs for Britain."
Beijing has been gradually expanding the curreny's use outside China as trade and investment volumes have grown. The yuan is already traded in Hong Kong as other financial centers, including Frankfurt and Paris, have also looked at applying for authorization to handle the currency.
As the world's second-largest economy seeks more influence for the yuan globally, the British pound will become the fourth big currency with direct trading links - a privilege that has so far been limited to the US and Australian dollars and the Japanese yen.
hg/mkg (Reuters, AP)