Beijing picks London for first yuan-bond outside China

[LONDON] China's government has launched a renminbi-denominated sovereign bond in London, the first of its kind outside of the world's second biggest economy, Britain's Treasury said on Thursday.

Beijing issued a bond worth 3.0 billion yuan (S$632 million), the Treasury said in a statement.

"Choosing London as the destination to issue this bond - the first Chinese sovereign RMB bond issued outside of China - reinforces the UK's strong economic and financial relationship with China," finance minister George Osborne said in the statement.

The move comes after The People's Bank of China last year launched its own yuan-denominated bond in London - in a debt sale worth 5.0 billion yuan, or yuan.

It is said to have been the first time that a yuan-denominated bond auction has taken place outside of China and Hong Kong.

Britain, which next month votes in a referendum on whether to remain part of the European Union, is seeking out China to be a key economic partner.

"London's attractiveness to foreign investors is clear but its status as the world's leading financial centre has been hard won," Chancellor of the Exchequer Osborne added Thursday.

"It is crucial we do not put it at risk by voting to leave the EU on 23 June," he added.

Prime Minister David Cameron's Conservative government has meanwhile been accused by the main opposition Labour party that its push for closer ties with China is holding back efforts to save 15,000 steel jobs.

India's Tata Steel is selling its UK assets, blaming the move on a glut of cheap Chinese imports of the metal that is used in construction. Cameron's government meanwhile faces accusations that it has blocked higher EU tariffs.

In a sign of ever-closer ties, Britain rolled out the red carpet for President Xi Jinping on a state visit last year which included a banquet hosted by Queen Elizabeth II.

But earlier this month it was revealed that during the visit, the queen was caught on camera describing some Chinese officials as "very rude" in a rare diplomatic gaffe by the British monarch.

The visit yielded trade deals worth £40 billion, including China taking a one-third stake in the troubled project to build Britain's first nuclear plant in decades at Hinkley Point in southwest England.

AFP