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City of London update

BritCham / CBBC
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City of London update, 05/15
China’s financial and economic reform has progressed markedly under President Xi Jinping, ranging from the launch of the Shanghai-Hong Kong Stock Connect in 2014 to the creation of a truly global renminbi (RMB) clearing bank network and development of the free trade zone model for regulatory testing. Global businesses and investors are now better able to access China's financial markets than ever before with the internationalisation of the RMB accepted as an inevitable part of this increasing openness.
This perspective is shared by IMF Managing Director Christine Lagarde, who stated it was “not a question of if, it’s a question of when” the RMB will join the basket of currencies comprising the Fund’s Special Drawing Right (SDR), ahead of the instrument’s review later this year. A number of senior Chinese officials have also publicly mentioned their discussions with the IMF, highlighting the significance of such developments in aiding China’s adaption to a ‘new normal’ of slower but higher quality growth, and the potential dividends of implementing a targeted, pro-market economic strategy.
The importance of domestic financial reform to China’s continued development and RMB internationalisation therefore cannot be overlooked. With this in mind the City of London has published Expert perspectives on China's capital markets, a collection of comments from Chinese capital market experts drawing upon their experiences doing business in China. As the comments reflect, much of the policy and cultural changes associated with capital market liberalisation are still underway, and it is difficult to predict the final outcome or the full meaning for both domestic and international financial services.
With the focus on these developments in China, it is clear that the UK still has an important role to play. As one of the leading international financial centres it is vital that the UK seize the opportunities for new investment and business opportunities that arise as a result. With the new UK Government firmly in place, I look forward to renewed discussions on a policy level and the continued strong relationship between China and the UK, which can only support the internationalisation of the RMB and the UK's continued growth as an RMB centre.
Mark Boleat
Policy Chairman, City of London
Chairman of the Steering Committee of the City of London RMB initiative
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