Britain to promote London as renminbi market hub

In a bid to leverage faster Asian growth, Britain is planning to turn London into a major foreign exchange trading centre for the Chinese renminbi. The move would also strengthen the city's position as a financial centre in the wake of the banking crisis.

According to George Osborne, the chancellor of the Exchequer, he was working with Chinese and British banks to establish London as a new hub for the renminbi market. Osborne is on a visit to Hong Kong.

He said in a speech to the Asian Financial Forum in Hong Kong yesterday, ''This is not just an accident of time zone, or our language, although both are important. It reflects London's strength in product development, its regulatory structure, and the depth, breadth and international reach of its financial markets.''

The pledge comes against the backdrop of an economic slowdown in Europe, which is being increasingly felt in Britain with some British banks threatening to move their headquarters abroad with tougher financial regulation.

The British government is initiating steps towards creating a Chinese currency hub in London in an attempt to boost city's role as a financial centre vis-à-vis New York and Hong Kong, even as it helps Britain attract Chinese investments in other sectors, including infrastructure.

Osborne pointed out that London had already emerged as the largest foreign exchange market in the world. He added  that the growing use of the renminbi would ''bring substantial benefit to Chinese economic development and the wider world economy.''