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London - China Construction Bank, the country's second-largest lender, clinched a deal to become Britain's first clearing bank for renminbi as London bids to become the leading Western centre for the offshore yuan trade .
As China, the world's second largest economy, promotes the use of its currency in international trade, London is competing with Luxembourg, New York, Paris and Frankfurt to become the top offshore yuan centre in the Western time zone.
London, which dominates the $5trn-a-day global foreign exchange market, accounts for two thirds of all renminbi payments outside of China and Hong Kong, according to Britain's finance minister, George Osborne.
"Today's appointment is another major step forward for the UK as the western hub of Chinese finance," Osborne said in a statement on Wednesday.
Hong Kong remains by far the largest centre for offshore yuan deposits. Deposits in Taiwan, Singapore and Macau also dwarf those in European capitals. New York lags far behind.
Bank of England chief Mark Carney said the clearing deal would help cross-border use of renminbi (RMB).
"China Construction Bank will play a valuable role in facilitating greater use of the RMB for trade, investment and other economic activities in the UK, particularly by providing a further option for UK firms to clear and settle their RMB activity within the London market," Carney said.
