London to become next RMB offshore centre

Discussion in 'China' started by amoy, Jan 21, 2012.

  1. amoy

    amoy Senior Member Senior Member

    Joined:
    Jan 17, 2010
    Messages:
    5,524
    Likes Received:
    1,548
    London to become an offshore RMB centre
    By PBI Editorial
    08 SEPT 2011

    London could be in line to become an offshore trading centre for the Chinese renminbi (RMB), media reports suggest.

    The UK Chancellor of the Exchequer George Osborne and Chinese vice-premier minister Wang Qishan are expected to discuss the growth of RMB trading in London at a meeting in the UK’s capital, according to the Financial Times.

    Treasury officials are yet to respond to PBI’s enquiry for more information on discussions.



    Big boost for UK industry

    The ability to trade RMB would be a major coup for London as a financial centre as it would give private banks and wealth managers the ability to invest in the rapidly appreciating Chinese currency on behalf of their clients without needing a physical base in Asia.

    Many private banks, including Barclays Wealth, DBS, HSBC Private Bank, OCBC, are already offering RMB products and services.

    Currently, Hong Kong is the only RMB licensed offshore trading centre.

    According to the latest Hong Kong Monetary Authority monthly statistical data, RMB deposits in Hong Kong climbed by 3.4% to RMB572.2bn ($70bn) at the end of July.


    London to beat out Singapore?

    In June, China’s CITIC Bank predicted Singapore was poised to become the second offshore RMB centre after Hong Kong.

    CITIC’s China Banking Group chief economist/strategist Liao Qun said the second phase of RMB internationalisation, following Hong Kong and Macau, was likely to happen in the Association of Southeast Asian Nations region.

    Meanwhile, the Securities and Futures Commission (SFC), Hong Kong’s securities regulator, said it is ready to authorise retail fund products managed by holders of Renminbi Qualified Foreign Institutional Investors (RQFII) quotas.

    New foreign direct investment measures are in place permitting RMB raised or borrowed in Hong Kong to flow into the Mainland for direct investment.

    The RQFII quota has been set at RMB20bn.
     
  2.  
  3. Bhadra

    Bhadra Defence Professionals Defence Professionals Senior Member

    Joined:
    Jul 11, 2011
    Messages:
    6,687
    Likes Received:
    2,357
    Why do not the Chinese Capture London and make it Indian outpost since Indians are quite a lot in London?
     
  4. cir

    cir Senior Member Senior Member

    Joined:
    Dec 28, 2010
    Messages:
    1,996
    Likes Received:
    269
    January 20, 2012 9:44 pm

    Open approach attracts Chinese investors

    By George Parker and Anousha Sakoui in London and Leslie Hook in Beijing

    China’s sovereign wealth fund tied up its purchase of an 8.6 per cent stake in Thames Water yesterday, amid signs that Beijing sees its expanding investments in Britain as a bridgehead for a much bigger expansion into the US.

    The deal confirms Britain’s position as the most popular European destination for Chinese inward investment by value and follows a visit by George Osborne, chancellor, to Beijing this week to promote the advantage of putting money into the country’s utilities and infrastructure.

    Lou Jiwei, chairman of the $410bn China Investment Corporation, wrote last year in the Financial Times that Britain offered a good starting point in its investments in western infrastructure, saying it had “one of the most open economies in the world”.

    But British officials say that Beijing also regards the UK as a “demonstration project” to reassure sceptics in the US that it can be a reliable and valuable source of inward investment without compromising national security.

    The US obstructed a bid in 2005 by the Chinese National Offshore Oil Corporation for Unical, a Californian oil company, on national security grounds. More recently Huawei, a Chinese telecommunications equipment maker, has suffered similar problems in investing in the US market.

    Mr Osborne’s pitch is that Britain is completely open and does not discriminate against foreigners, nor does it regard the rise of China as a threat. Politicians in countries including the US and France are often more hostile in their approach.

    The chancellor’s team say officials in Beijing were also impressed by the government’s new “national infrastructure plan”, which sets out 40 priority projects including a new high speed rail link from London to the north, new ports, a broadband scheme and investment in energy networks.

    “They seemed familiar with the idea of a national plan,” said one British official close to the talks, although Mr Osborne’s team joke that his Chinese interlocutors may find it slightly easier to drive through their own infrastructure plans. Chinese officials said they have asked Tim Geithner, US Treasury secretary, to come up with a similar list of projects.

    Mr Osborne expects the CIC to announce new investments in British utility and infrastructure companies in the coming weeks.

    Meanwhile he hopes that Industrial and Commercial Bank of China, with which he held talks this week, will act as an intermediary in channelling Chinese investment into longer-term “greenfield” infrastructure projects, possibly including high speed rail.

    In the past Britain has often suffered by comparison with France and Germany in its ability to sign contracts to export industrial goods to China, but so far it is ahead of its two European neighbours in its ability to secure inward investment.

    Mr Osborne also hopes that a close commercial relationship with China will boost Britain’s ability to export services – including legal, financial and education – to the expanding Chinese market, as well as high-end manufactured goods such as aircraft engines.

    The latest Chinese purchase of a stake in Thames Water highlights Chinese investors’ preference for low-risk physical assets that carry steady returns.

    Among the European stakes expected to come up for sale from sovereign nations are electricity transmission assets in Portugal and Ireland. These have attracted Chinese interest, say bankers.

    More Chinese deals are expected this year as cash-strapped governments and companies put infrastructure on the auction block, particularly in the utilities sector, including power and water.

    While Chinese power companies are relatively new to European markets, their spending power and close ties to Chinese financial institutions make them attractive partners for debt-strapped European governments.

    China’s Three Gorges, the operator of the massive Three Gorges hydroelectric dam on the Yangtze, recently won a hotly contested bidding process for a stake in EDP, Portugal’s dominant power company. China’s State Grid, meanwhile, is in the final bidding round for Portugal’s REN, which operates power transmission and natural gas distribution networks.

    “The eurozone sovereign debt crisis is leading to a significant change in investment strategy by those nations running a budget surplus,” said Pip McCrostie, global head of transactions at Ernst & Young. “It’s unlikely that Thames Water will be the only deal of its kind as cash-rich economies such as China refocus their investment strategy from government debt and market debt securities to hard assets.”

    She adds that China’s strategy is based on a wealth preservation. “For China, the UK – with its triple A rating, non-euro based currency and low risk of default – is an attractive market.”

    Britain is seen by some mergers and acquisitions specialists as one of the most open to the Chinese. “The price is right and sterling is cheap,” said one dealmaker. “The UK is uniquely open to Chinese buyers. Most mature markets have foreign investment regulations.”

    Open approach attracts Chinese investors - FT.com
     
  5. Bhadra

    Bhadra Defence Professionals Defence Professionals Senior Member

    Joined:
    Jul 11, 2011
    Messages:
    6,687
    Likes Received:
    2,357
    Chinese will have to learn to put up with past masters and learn English !!
     
  6. Ray

    Ray The Chairman Defence Professionals Moderator

    Joined:
    Apr 17, 2009
    Messages:
    43,117
    Likes Received:
    23,545
    Location:
    Somewhere
    Not only learning English, but also acquire an accent that can be understood.
     
  7. Bhadra

    Bhadra Defence Professionals Defence Professionals Senior Member

    Joined:
    Jul 11, 2011
    Messages:
    6,687
    Likes Received:
    2,357
    Chinglish will not do like Hinglish is doing? Hanisation will also be problematic, I suppose !
     
  8. cir

    cir Senior Member Senior Member

    Joined:
    Dec 28, 2010
    Messages:
    1,996
    Likes Received:
    269
    Past masters? Do you happen to mean Indians'? :rofl:

    Indians are the ones who speak English with heavy accent. Same for people from HK, Macau and South East Asia.

    Mainland Chinese, especially those in their teens or early twenties, either don't speak English or do so with an accent that might be expected of an Eaton graduate. lol!
     
    Last edited: Jan 21, 2012
  9. Ray

    Ray The Chairman Defence Professionals Moderator

    Joined:
    Apr 17, 2009
    Messages:
    43,117
    Likes Received:
    23,545
    Location:
    Somewhere
    Try me.

    I have no heavy accent and many like me, don't.

    In England, they are used to the Indian accent.

    But catch them knowing the Chinese guttural noise!

    The fact you do not know how Eton is spelt is an adequate reminder how you will mess up the pronunciation with guttural and sing song Chinese style of speech!

    Lol to you!
     
  10. cir

    cir Senior Member Senior Member

    Joined:
    Dec 28, 2010
    Messages:
    1,996
    Likes Received:
    269
    English?

    Big deal huh?!

    It won't be the dominant language of business and diplomacy for very long now。

    Hope you all live to see the day!:rofl:
     
  11. RedDragon

    RedDragon Regular Member

    Joined:
    Jan 29, 2011
    Messages:
    536
    Likes Received:
    69
    For my experience, the higher position the Indian is, the less accent of English they have. Very interesting.
     

Share This Page