Following a meeting in Beijing between UK chancellor George Osborne and Ma Kai, the Chinese vice-premier, it has been agreed that the People’s Bank of China will issue short-term debt in London. The short-term bonds would be denominated in the RMB, in London – the first time such debt has been issued outside China. As of yet there are no plans for longer-term bond issuance.

Osborne has previously stated his intention of making the UK the chief offshore base for Chinese finance

“The People’s Bank of China will issue short term central bank renminbi bonds in London. This is the first time these bonds will have been issued outside greater China. This is a major step in developing this market infrastructure,” said the UK Chancellor.

Osborne has previously stated his intention of making the UK the chief offshore base for Chinese finance, proclaiming that the short-term debt issuance agreement would be “China’s bridge into western financial markets”. “I want the UK to be the natural Western hub for renminbi trading,” he also noted, saying that he believes the deal “cements London as the pre-eminent location for renminbi trading and Chinese investment in the West.”

In October 2014, the UK became the first western country to issue a sovereign bond in China’s currency. Being the world’s first non-Chinese issuance of sovereign RMB debt and worth £300m, it was used to finance Britain’s reserves.

The agreement was part of the UK-China Economic and Financial Dialogue, hosted in Beijing. In total 53 agreements were made between the two economies, including the announcement of a feasibility study to look into creating a direct “stock connect” link between the London Stock Exchange and financial markets in Shanghai. China has also pledged £2bn to the UK to underwrite the financing of the UK’s Hinkley Point nuclear power station, opening up the way for other Chinese-UK nuclear deals, such as the potential majority Chinese ownership of a nuclear power plant in Bradwell, Essex.