Experts welcome China-Britain financial co-op

LONDON - British experts welcomed deepening financial cooperation between China and the United Kingdom as "a promising blueprint for the two countries," as British Chancellor of the Exchequer George Osborne continued his five-day trade mission in Beijing seeking to strengthen links with the world's second-largest economy.

"We welcome the government's commitment to ensuring that the UK continues to attract Chinese business. These encouraging moves also demonstrate that the UK and Chinese authorities recognize London's role as a leading global center for offshore RMB," Mark Boleat, policy chairman of the City of London Corporation, said.

During Osborne's visit in China, China and the United Kingdom agreed to strengthen cooperation in macroeconomic, trade, investment and financial sectors at the fifth China-UK Economic and Financial Dialogue (EFD) held on Tuesday.

China and the United Kingdom also agreed to continue to build London into a major offshore market for yuan trading, underlining the strong financial ties between the two countries.

The Prudential Regulation Authority, one of the financial watchdogs in Britain, will offer discussions with leading Chinese banks with a view to letting them run wholesale operations through branches in London.

"We would like to see more Chinese banks and other financial institutions operating in London and playing a role commensurate with their global size, which will bring greater opportunities of financial cooperation between the UK and China. The City of London has been working to support and encourage increased dialogue between regulators from both sides, so this is a positive step forward," Boleat said.

Michael Moore, Warwick Business School professor, commented: "This is a good move by the chancellor for London to retain its status as the world's center for foreign exchange trade."

The financial links between the two countries have been strengthened over the past few years. For example, the Bank of England was the first among European central banks to establish a currency-swap facility with China's counterpart when it agreed on a line of 200 billion yuan in June.