Chinese premier's visit to further boost China-Britain economic ties
- POSTED: 17 Jun 2014 16:30
Chinese Premier Li Keqiang is expected to announce $30 billion worth of business deals on his trip to the United Kingdom.
LONDON: Chinese Premier Li Keqiang is expected to announce $30 billion worth of business deals on his trip to the United Kingdom.
Li's visit to London began amid calls from China for Heathrow Airport to be expanded to boost business ties while Britain is hoping China will invest in some of the country's major infrastructure.
Among other deals on the table, China Construction Bank has been selected to become the first yuan clearing bank for London - a move that secures the city as a global centre for renminbi trading.
UK Chancellor George Osborne has made creating a renminbi hub in London a priority.
Osborne promised that he and Bank of England Governor Mark Carney will regulate to safeguard this sector's future in London.
He said: "London is home to 40 per cent of the global foreign exchange business, 45 per cent of the over the counter derivatives trading and 70 per cent of trading in international bonds. Mark Carney and I intend to keep it that way."
British media reported that China demanded a meeting for Li with the Queen and threatened to cancel the trip if it was not granted.
Not being a head of state, an audience with the Queen would not be a matter of course.
However, the coalition government here at Westminster is being as accommodating as possible to secure those signatures on business deals.
Competition for Chinese investment is fierce. Britain is one of many European countries digging for Chinese treasure and it lags behind rivals like Germany in terms of exports to China and other emerging economies.
The move to cement London's position as a renminbi hub reflects an awareness that financial services remain a major strength for the British economy.
Ben Digby, Assistant Director (Senior) at the Confederation of British Industry, explained: "In the midst of the financial crisis, there was a lot of talk of the UK needing to rebalance its economy to focus on other sectors as opposed to financial services. Now I think it's important and there's huge growth potential from other areas of our economy.
"But we still have a reputation for really world leading financial services, so whether it's China or whether it's anywhere else in the world, promoting our financial services is really, really important to the UK, just as important now as it was five years ago."
Official data shows annual goods exports to China have grown to £12.4 billion last year from £7.6 billion in 2010 when Cameron took office.
Britain lags behind some key rivals when it comes to Chinese trade but things appear to be moving in the right direction.