London's growing role in offshore yuan-denominated services will boost trade between China and Europe, David Wootton, lord mayor of the City of London, said in Beijing on Tuesday.
He said that renminbi business in the United Kingdom had barely been influenced by the decline in trade between China and Europe this year.
"It is now the right time for London to develop as a 'western hub' for the international renminbi market as a complement to Hong Kong and other financial centers," he said.
"The development of London as an international center for renminbi business will help facilitate trade with China for European corporations."
In April, London announced its ambition to become a center for offshore renminbi trading.
According to the report "London: a center for renminbi business", which was announced by British Chancellor of the Exchequer George Osborne, commercial loans worth 280 million yuan ($44.2 million) were made in London in 2011. In that year, the city was also the site of 88 million yuan in trade services and 16.3 billion yuan in import and export financing.
The report also said that $680 million in renminbi was spot traded in London each day on average, accounting for 26 percent of the $2.7 billion in the currency that was spot traded on average throughout the world.
According to Eurostat, the European Union's statistical institution, in the first five months of this year, the total volume of Sino-European trade was around $230 billion, up 2.2 percent year-on-year. The growth rate was 5.9 percent in the same period last year.
China remained the European Union's largest source of imports between January and May, according to Eurostat.
Deposited renminbi in London, which is an indicator of the growth in the offshore renminbi market, was around 109 billion yuan by the end of 2011, said a report from the global financial services consultancy Bourse Consult LLP.
London's renminbi deposit account for personal and corporate customers contained 35 billion yuan, compared with customer deposits totaling 589 billion yuan in Hong Kong in December 2011, the report said.
London's financial institutions are longstanding participants in the Chinese financial market, and the City of London is seeking to expand this role to support the development of the sector, Wootton said.
Bank of China, as one of the leading providers of cross-border renminbi products and services, "fully endorses the efforts made by the City of London Corp to position London as an offshore renminbi center", said Fang Wenjian, general manager of the Bank of China Ltd London Branch.
"This is an important step in the process of encouraging the increased use of the renminbi outside China, which will not only benefit Europe and China, but will strengthen London's position as a global financial center," Fang said.
Standard Chartered Bank said it is also committed to helping the internationalization of the yuan, which will benefit China and the global economy.
