Chinese bank issues the UK’s first-ever renminbi bonds in London

CHINA’S first offshore debt sale in the UK went ahead yesterday, with the government-owned Industrial and Commercial Bank of China (ICBC) issuing bonds to the value of 2bn renminbi (£206.3m).

The Royal Bank of Scotland (RBS), Standard Chartered and JP Morgan managed the sale of the bank’s debt securities. An RBS spokesperson told City A.M. the bank was excited to be involved with the deal as a new opportunity.

There were two varieties of bond issued, one maturing after three and one after five years, bearing 3.3 and 3.7 per cent interest respectively.

Chancellor George Osborne promoted a closer financial relationship with the country during a recent trip to China, but the Treasury declined to comment on the bond issue last night.

However, Treasury minister Sajid Javid suggested yesterday that a renminbi clearing bank could be set up in London to enhance the restricted currency’s liquidity. He said: “Should London decide to pursue a local infrastructure arrangement, Chinese banks have a great advantage in providing clearing services.”

Earlier this year, the Bank of England and People’s Bank of China agreed a sterling-renminbi swap line, as part of an agreement to promote trade.

The highest tier of China’s communist party also announced further economic reforms yesterday, promising a greater role for market forces, after four days of closed meetings.

The confidential summit ended with the release of a statement, pledging that the market economy in China would play a “decisive role” in resource allocation, with more influence in the price system, construction and the financial sector, alongside agriculture reform.