London now represents nearly half of all RMB foreign exchange trading, according to a report published today.

The 4th London RMB Business Quarterly, published by the City of London Corporation and the People's Bank of China (PBC), reveals that the average daily trading volume of the Chinese currency in London in Q1 2019 was more than ￡78 billion ($94.76 billion), up 30 percent year-on-year. The UK capital now accounts for 44.46 percent of the total global FX transactions. 

The report also reveals that cross-border receipts and payments between China and the UK saw massive growth, hitting more than 55 billion RMB, up 86 percent on February 2019 and more than 100 percent more than the same month in 2018.

Investor appetite for dim sum bonds continued, with two more added to the London Stock Exchange in May 2019, meaning 101 dim sum bonds are now listed on the exchange with an outstanding value of 27.63 billion RMB.

In addition, the report contains detailed analysis of the role of the RMB in the Belt and Road Initiative (BRI) by the Society for Worldwide Interbank Financial Telecommunication (SWIFT) and China Construction Bank's London Branch, the UK RMB clearing bank. Information is provided on payments in BRI countries and use of the currency in African nations. 

"This report shows yet again that London continues to dominate the RMB offshore market. More importantly, it reveals that the fundamentals of London remain strong in the face of uncertainty, particularly in terms of foreign exchange," said Catherine McGuinness, policy chair at the City of London Corporation.

"Few will deny that the Chinese currency is set to become a more important player on the world stage, particularly through the lens of China's Belt and Road Initiative. As London is the FX capital of the world, it's obvious that the RMB should be traded and cleared here. That's why the City Corporation will continue to support and promote the UK and London's leading role in this journey," McGuinness added.

"In line with the initiative of the Belt and Road, the usage of RMB in countries along the Belt and Road has been steadily expanded. The aim of our latest report is to focus on the RMB cross-border usage in the Belt and Road countries, which could be the catalyst for RMB internationalization in the future," said Jin Mei, chief representative of the People's Bank of China's Representative Office for Europe.

"The PBC will continue optimizing policies on RMB cross-border use, improving the infrastructure for the global use of RMB, meeting the reasonable demands of market entities and pushing the global use of RMB to a new level," Jin added.

The first London RMB Business Quarterly was launched by the City of London Corporation and the People's Bank of China Representative Office for Europe in September 2018. Backed by HM Treasury, the publication marks a continuation of the City Corporation's influential Renminbi business initiative, a campaign that ran from 2012 to 2015 and that helped London become the leading offshore RMB trading hub outside of Asia.

The aim of the reports, which are published every quarter, is to help cement London's position as an RMB hub, by encouraging the issuance of more RMB denominated products and transactions in the City. 

The City of London Corporation has had a dedicated program of engagement with China for many years, and has had representative offices in Beijing and Shanghai since 2008. There are more than 30 Chinese institutions in the City and more are in the process of opening a representative office.