UK finance body lands co-operation deal with colossal Chinese bank

(Source: Getty)

The government has been keen to promote business ties with China since at least the beginning of the current coalition - today’s visit by Premier Li Keqiang has been no exception.

TheCityUK today signed a memorandum of understanding with a massive Chinese government bank, with a little help from the UK’s Foreign and Commonwealth Office (FCO).

The China Development Bank Corporation (CDB) is a colossal state-owned institution, issuing RMB 1.23 trillion (£120bn) in debt during 2012, nearly twice as much as it did in 2006 and more than 15 times as much as it did when it began in 1994.

The deal has three aspects, according to TheCityUK:

  • To support CDB to expand its financing and lending activity in the UK, including in infrastructure-related investment;

  • To build awareness and understanding of the role of the Chinese currency (RMB) in supporting China-UK and global cross-border investment; and

  • To promote more comprehensive China-UK cooperation in RMB-related and other business.

According to TheCityUK (and Standard Life) chairman, says that the CDB wants to “expand significantly its operations in London” - which could give the UK finance hub a leg up against Germany in an ongoing contest for dominance as a Chinese currency trading hub.

This sort of agreement seems like something that might have previously been done with the British Bankers’ Association - but TheCityUK have taken an increasingly important profile recently, and it’s a big prize for them to be so closely involved.