Britain in call for China-EU FTA study
Print Edition
CHINA and Britain yesterday called for the swift launch of joint feasibility study on a China-EU Free Trade Agreement.
In a joint declaration issued yesterday during President Xi Jinping’s state visit, Britain also said it supported the inclusion of China’s currency, the yuan, into the International Monetary Fund’s SDR basket subject to meeting existing criteria in the IMF’s upcoming review.
The joint declaration covered a wide range of priorities in building a “global comprehensive strategic partnership for the 21st Century.”
The new partnership was announced by Xi at a news conference on Wednesday after talks with British Prime Minister David Cameron. Yesterday’s declaration specified the bilateral relations with pledges of joint efforts in fields ranging from yuan internationalization and China-EU free trade to cyber security and climate change.
Xi’s visit to Britain, the first by a Chinese president in a decade, has been hailed as opening a “golden era” in China-UK relations. “The two sides recognize the global significance and strategic importance of stronger China-UK relations in promoting global peace, stability and prosperity,” the declaration said.
Both sides support the Shanghai Stock Exchange and the London Stock Exchange to carry out a feasibility study on a stock connect, according to the declaration.
They would also establish a high-level security dialogue, with both sides agreeing not to conduct or support cyber-enabled theft of intellectual property, trade secrets or confidential business information.
China has been pushing its currency to wider use on the global stage, and it has taken a big stride forward during Xi’s visit to the UK.
On Wednesday, China’s central bank announced it had issued 5-billion yuan-denominated notes in London, in the first offshore issuance of such debts outside China. The interest rate of the one-year notes was set at 3.1 percent.
“The move is an important part of the yuan’s globalization strategy to increase its presence in the global bond market,” said Sang Baichuan, director of the Institute of International Business at the University of International Business and Economics.
Yang Tao, assistant director of the Institute of Finance and Banking under the Chinese Academy of Social Sciences, said the move in the financial hub of London will promote the yuan as an investment currency in international finance.
Previously, China has mainly issued offshore RMB debts in Hong Kong.
Apart from Singapore and Hong Kong, Britain is already the biggest offshore yuan market. More than 50 percent of yuan foreign exchange trading outside China and Hong Kong is done in Britain.
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