When trading volumes in the Chinese renminbi toppled those of the pound against the euro late last year in London, it was a moment for policymakers to savour. Orders came to a daily average of $73bn in October, according to the Bank of England, underscoring the UK’s status as the world’s biggest renminbi trading hub outside China.
Heavy trading in the renminbi is a reward for an effort begun several years ago, as China set out in earnest to “internationalise” its currency. Beijing’s aim was for the renminbi to eventually take its place alongside the dollar in central-bank reserves around the world, befitting China’s status as the world’s number two economy. George Osborne, then UK chancellor, saw an opportunity: a chance to dominate the offshore renminbi market, potentially yielding billions of pounds of tax revenues.
Rival centres in Asia and Europe have fallen away, as the UK pressed ahead with a charm offensive. According to Swift, the payments company, more than 36 per cent of renminbi transactions were carried out in the UK in December last year, compared with about 6 per cent each in France and Singapore.