Britain stepped up its bid to become a leading trading partner with China on Friday with the launch of the world’s first offshore renminbi government bond.
“The government is taking these steps in recognition of the increasingly prominent role that renminbi is playing in the global economy and financial markets, including as a potential future reserve currency,” said Chancellor of the Exchequer George Osborne at the end of a China-U.K. investment summit held in London.
The deal is expected to launch within the next few weeks or months and proceeds will be used to finance the U.K. foreign currency reserves.
“The bond is intended to be a one-off issuance, with the benefit of contributing liquidity to the small but fast-growing renminbi offshore market and attracting other market players in both the private and official sectors,” said Osborne.
The summit was co-hosted by Osborne and Chinese Vice-Premier Ma Kai and resulted in over £2.4 billion ($3.9 billion) in commercial deals being struck between Britain and China.
It came as China works to internationalize its currency and the U.K. competes to be China’s main trading hub in Europe. The U.K. is already one of Europe’s largest investors in China, and among the largest destinations in Europe for China’s outward investment. It has set an ambitious target of doubling overall exports to £1 trillion by 2020 and hopes that China trade will be a large contributor.