China’s Currency Rise Continues

On December 1, the Industrial and Commercial Bank of China, also known as icbc, opened its first London branch. This is the first branch established in the United Kingdom by a mainland Chinese bank since the founding of Communist China in 1949. This historic moment is the latest step in the rise of China’s currency, the renminbi.

icbc is the world’s largest bank based on capital and assets. This new branch will position China, and its vast savings’ pool, to become a stronger leader in the global economy. China’s currency is now the seventh most used currency in international payments. The progress is no surprise, since the renminbi has made some impressive gains this year.

The appointment of the first official renminbi clearing bank outside of Asia opened this June in London. This came during the first UK-China Financial Forum.

In October, the UK issued its own sovereign renminbi bond, making it the first Western country to do so. The bond was used to finance Britain’s reserve. It was hugely successful, showing that the renminbi has potential as a reserve currency.

China has invested $13 billion in the United Kingdom over the past two years. This figure surpasses the total of the previous three decades.

Continue to watch China’s economy rise. As it gains better access to global markets and invests in national developments, it will be in a better position to help bring down the dollar’s reserve currency status.