Business

London says yes to the yuan, no comment to local politics

 

By Kumiko Lau

Upon the devaluation of renminbi in August and despite market uncertainty, London stood firm in supporting the internationalisation of the Chinese yuan.

Alderman Alan Yarrow, Lord Mayor of City of London and the British representative of financial and professional services industry said last Friday that the devaluation of yuan did not change the United Kingdom's view on developing itself into the largest renminbi centre in the West.While China is mulling a 15 to 20 per cent devaluation of its currency by year-end 2016 according to research firm IDEAglobal, Mr Yarrow said that it was inevitable for China to devaluate its currency alongside with the continuous growth of renminbi business.

"It is an ideal strategy for China to use its reserve to stabilise the volatilities of the currency under its current transitional economy model." He added that the devaluation of the renminbi also complemented the stage of the journey for the government to rebuild its economy. And that London is supportive over the inclusive of yuan in the International Monetary Fund's mixed currency international reserve asset, Special Drawing Rights which the next review will happen in October 2016.

Yarrow said the United Kingdom is still firm in developing itself into the largest RMB centre in the West. (Photo Courtesy: Kumiko Lau)
Yarrow said the United Kingdom is still firm in developing itself into the largest RMB centre in the West. (Photo Courtesy: Kumiko Lau)

 

On the flip side, when Mr Yarrow was asked to comment on whether the Chief Executive of Hong Kong overrides the separation of power, he said that one country two systems inevitably brings conflicts into the play but he has no doubt that this system and the rule of law are critical to the development of trade. He however refused to further elaborate the UK's stance on the democratic development in its former colony. He said that it was to the Chief Executive and the Beijing government to comment and articulate on the matter.

"We believe that the Chinese government is very keen on universal suffrage even though this is not included in the Sino-British Joint Declaration."

Mr Yarrow will be hosting President Xi Jinping in October during his visit to the United Kingdom. Mr Xi is expected to meet with the British financial sector and give a speech at the Gail Hall, London.

 

(Edited by Crystal Tse. Copy-edited by Mari Chow)

 

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