Interview: RMB sees rising importance as Chinese economy grows, says London finance policymaker

LONDON, April 20 (Xinhua) -- With China being the second largest economy in the world and poised to grow further, it is "only natural" that the importance of its currency renminbi (RMB) is also growing, the City of London policy chief has said.

As the Chinese economy grows, "inevitably, its currency is going to also gain importance and as China seeks to internationalize it, then of course we will see the RMB continues to be a significant currency in global markets," said Catherine McGuinness, chair of the Policy and Resources Committee at the City of London Corporation.

London has played a role in the development of the Chinese currency, as it has become the world's leading offshore RMB trading center. "We've seen a fantastic growth in the trading of the RMB over the last few years," McGuinness said in a recent interview with Xinhua.

According to the London RMB Business Quarterly report issued in March, the average daily offshore RMB trading volume in London saw a 7-percent increase year on year in 2021, and there was a 130-percent increase in the value of the RMB-dominated Dim Sum bonds that were listed on the London Stock Exchange.

Speaking of the popularity of the RMB in London, McGuinness told Xinhua that it is "not surprising" as London is the center for foreign exchange, and "we have a strong connection with trade in China."

"We fully expect London with its global reach, its innovative ecosystem, to remain at the heart of currency trading going forward," she said.

Speaking of the ecosystem and opportunities London offers, McGuinness said the Shanghai-London Stock Connect, for example, is "a great example of how an innovative product can be used to enable investors to access China's markets and Chinese investors, to access investment opportunities themselves."

"It's just one instance of how we could work with London's ecosystem and with the innovation that you can find here in order to provide access to global investment in capital markets," she added.

Now there are more than 40 Chinese financial institutions in the City of London, she said.

"I think they're an excellent bridge to the opportunities that this global financial center can bring. They can help connect besides the international institutions with the trading opportunities that there are here," she stressed.

On the impact of COVID-19, McGuinness said that "the pandemic has been a challenge for all of us, but it hasn't stopped trading in the global financial center, which London is."

"People have needed access to capital, they've needed access to foreign exchange," she added.

As for the prospect of the RMB's internationalization, McGuinness noted that "there are many challenges that we all face in the years ahead."

"There will be fluctuations ahead, depending on how the world moves, but we will also see the RMB continues to be an important player on the international stage," she said.