Osborne outlines plans for stronger British-Asian partnership

George Osborne has laid out the plans for Britain to become the home of Asian investment and finance in Europe.

Britain will be “the home of Asian investment and Asian finance in Europe”, according to the Chancellor of the Exchequer, who laid out plans for London to be a new hub for the Renminbi (RMB) market.

Speaking at the Asia Financial Forum in Hong Kong on Monday, George Osborne outlined a “deliberate, conscious effort that the British Government places on deepening Britain’s partnership with Asia”. “If we take the right steps, if we’re bold, then growth in Asia means growth in Britain,” he said.

Osborne said that this partnership should not be seen as a substitute to Britain’s relationships in Europe and the US, but instead an “essential complement” as Asia will be the “engine of world growth” in the future.

“A richer, stronger Asia is an opportunity for the world, not a threat – we should be bold enough to say it and to explain it to our own populations.”

The UK is now the largest source of foreign direct investment to China from within the whole European Union, with exports to China rising by 20% in 2011 and 40% in 2010. Meanwhile, exports to Hong Kong increased by 19%.

Osborne highlighted infrastructure as one of the many opportunities the UK brings for Chinese investors, “following the lead taken by Hong Kong’s own Cheung Kong Group, the largest overseas owner of UK infrastructure.”

“We in Britain can build on our position as the home of Asian investment and Asian finance in Europe – provided we’re bold enough to do what it takes to make that happen, and we will,” Osborne said.

As a complement to Hong Kong and other financial centres, Osborne intends to develop the RMB market in London, a city “perfectly placed to act as a gateway for Asian banking and investment in Europe, and a bridge to the US.”

“We are by some distance the world’s largest foreign exchange market; and the growing use of RMB in those global markets will bring substantial benefit to Chinese economic development and the wider world economy,” he said.