London’s legal sector is to benefit from plans to open a representative office of the China Development Bank Corporation (CDB), under a memorandum of understanding signed today.
Representative body TheCityUK signed the memorandum at the Foreign & Commonwealth Office in the presence of David Cameron and his Chinese opposite number Li Keqiang (pictured), who is visiting the UK this week.
His itinerary includes events attended by a number of City law firms.
The CDB is owned by the Chinese government and funds large-scale international infrastructure projects.
Chris Cummings, chief executive of TheCityUK, told the Gazette the MoU will enable the bank to set up a representative office in the UK to facilitate Chinese investment in nuclear, telecommunications and high-speed rail. This means there will be an even greater demand for ‘top-quality, professional legal advice, which is exciting news for the legal profession, not just in London but across the UK.’
Cummings said the move was a significant milestone to making London a hub for Chinese currency (RMB) traded business. He said 65% of RMB trading outside China is in London. ‘The legal framework to allow clearing and settlement was forged in London. That allows legal certainty and trades to happen,’ he said.
CDB’s chief executive, Zheng Zhijie, said: ‘London is one of the world’s global financial centres.
‘As the largest foreign lending and cooperation bank of China, it is important that CDB expands its operations there as we review our future funding requirements and investigate investment opportunities in infrastructure, which will enable us to achieve mutual benefit for China and the UK.’
This agreement aims:
- to support CDB to expand its financing and lending activity in the UK, including in infrastructure-related investment;
- to build awareness and understanding of the role of the Chinese currency (RMB) in supporting China-UK and global cross-border investment; and
- to promote more comprehensive China-UK cooperation in RMB-related and other business.