UK issues milestone RMB bonds

The United Kingdom has become the first Western country to issue an RMB sovereign bond, China's ambassador to Britain announced.

The move will push forward the internationalization of the RMB, said ambassador Liu Xiaoming at a ceremony on Tuesday. in which the British government listed its first RMB sovereign bond on the London Stock Exchange

The British Treasury successfully issued a RMB sovereign bond On Oct 14 with an amount of 3 billion RMB ($490 million) and a maturity period of three years.

The RMB will also become one of Britain's foreign exchange reserve currencies.

"It renewed British Government's commitment to making London a center for off-shore RMB business," Liu said.

Since the initiative was launched in 2011, Britain has move swiftly to promote the use of RMB. London and Beijing signed the first currency swap agreement between China and a Western country.

Britain was awarded the first RMB RQFII quota outside Asia and issued the first RMB denominated financial products.

"The issuance of sovereign debt in RMB has accentuated the British government's firm commitment to building London into one of the most dynamic off-shore RMB markets," Liu said.

The move has created a new milestone of RMB internationalization, he added.

After more than three decades of fast growth since reform and opening up, China has emerged as the world's largest trading nation, second largest economy, and the third largest destination for outbound direct investment. The RMB has become the world's seventh largest payment currency.

On the day of issuance, the order book closed with 85 orders totaling 5.8 billion RMB. "This fully demonstrates international market's confidence in RMB and in China's economic prospect," said Liu.

Liu also pointed out, the issuance reflected the demand of fast-growing economic ties between China and UK.

Bilateral trade between the UK and China hit a record high last year, and the first three quarters of this year saw another increase of 20%. This boost was much higher than the increase of trade between China and the EU. The total China-UK trade volume this year is expected to top $80 billion.

Chinese investment in Britain is soaring, with $18 billion injected over the past three years, more than the total investment in previous three decades.

"The fast advance of London as an off-shore RMB market will create win-win results, as it will greatly boost China-UK business links and economic ties. It will also deepen our bilateral trade and investment," said Liu.