China is preparing to issue debt in yuan

China is preparing to issue debt in yuan market in London, reports the Financial Times. So London will become the first foreign financial center in Beijing who performed such an operation related to efforts to promote the yuan globally.
Scheme for issue of Chinese Government in London will likely be announced during a visit of the President of the Asian country Xi Jinping in the UK, scheduled for next week. Such a move would be hailed as a major breakthrough for his hosts, who are trying to secure a competitive advantage over other European countries in attracting Chinese investment.
Financial center
"London is selected for this operation to other financial centers in Europe and the United States. This shows that Beijing considers London preferred location for building an offshore center for trade in yuan and foreign investments," says a representative of the British government, familiar with Xi Jinping's visit.
"This will be the first issue of renminbi-denominated bonds outside China. The aim is not so much to raise funds as to launch an offshore debt market in the Chinese currency," says Jenny Yang, an economist at Standard Chartered Bank.
China is determined to promote the yuan as an international currency, which reflects the growing economic and diplomatic influence Beijing in the world. The desire of the Chinese authorities is the yuan to be used more not only for payments, but also for investment. This will facilitate the raising of funding from abroad as the government and the companies.
Details about China's plans are not clear, but according to sources, the FT will probably first move is to issue short-term bonds of the People's Bank worth several billion yuan. This will serve to prepare the market and winning the approval of investors. After laying this foundation will follow and the issuance of government securities.
First steps
This will be the first emission yuan Securities in London. The state-controlled China Development Bank has issued bonds worth 2 billion. Yuan. China Development Bank is the main source of funding for Chinese investment abroad. Last year, the British government also issued denominated in the Chinese currency bonds worth 3 billion. Yuan. Thus Britain became the first Western country that has taken such a move.
The British government hopes to attract Chinese investment in infrastructure, including nuclear power Hinkley Point, as well as in high-speed rail links in the northern part of the country. It is expected that during the visit of Chinese President to be announced early air service between Manchester and Beijing.