britain's yuan trading deal reached

The China Daily report on the deal the British Chancellor of the Exchequer George Osborne reached in Hong Kong regarding London's participation in the offshore yuan market, indicates that a formal agreement was reached.

The Hong Kong Monetary Authority (HKMA), equivalent to a central bank, and the UK Treasury are launching a private-sector forum to strengthen links between Hong Kong and London in such areas as clearing and settlement, market liquidity, and the development of new yuan-denominated "products", the HKMA said in a news release. 


The forum will have representatives from financial institutions in Hong Kong and London, including HSBC, Standard Chartered, Bank of China, Deutsche Bank, and Barclays.



It will meet twice a year, with the first meeting to be held in Hong Kong in May, its release said.


"The fact that China will open its third yuan offshore market in London [in addition to Hong Kong and Singapore] is a strategic decision for the world's second-largest economy to increase the convertibility of the yuan and evolve [sic] the yuan into a reserve currency globally," said David Wang, executive director of the Royal Bank of Scotland (China) Co Ltd. 


He said a deeper economic partnership and a stronger willingness to cooperate underpin the establishment of such an offshore market.



Other Asian economists said that this move will facilitate trade, but that "convertibility" is not on the Chinese agenda for any time soon.