China and the UK welcome private-sector interest in developing an offshore market in London to trade the yuan.
Following a press conference on Thursday afternoon by Chinese Vice-Premier Wang Qishan and U.K. Chancellor of the Exchequer George Osborne, the two governments issued a statement confirming the agreement.
"We agreed to collaborate on the development of renminbi-denominated financial products and services in London, and our regulators stand ready to support this market," the Chancellor said.
The agreement will reinforce London's position as a global currency hub, whilst the yuan expands its offshore trading. Hong Kong is the only place permitted by China to act as a centre for deposits in the yuan, as the Chinese currency slowly becomes more flexible.
Osborne described the UK and China's technical cooperation on financial services as "unrivalled". He further stated: "No other country has the same level of integration with China as the UK. And these links are continuing to grow".
Wang and Osborne co-chaired the Fourth China-UK Economic and Financial Dialogue in London on Thursday 8 June.
The dialogue covered a wide range of issues including financial regulation and international economic policy coordination.
The two sides signed a landmark Memorandum of Understanding on Enhancing Co-operation on Infrastructure.
It was also announced that the MOU will set up a "task force" - a high-level forum to highlight investment opportunities in UK and Chinese markets. Its aim is to enable more effective engagement with Chinese enterprises and Sovereign Wealth funds, whilst helping UK companies access High Value Opportunities in China.