reevaluated in 2015, or even earlier, and currencies consistent with existing criteria
would be included in the“basket”of the Special Drawing Rights.^6
Furthermore, China also started vigorously promoting RMB internationalization
and cooperating with the EU on this aspect. China is striving to turn London into an
RMB offshore trading center. Moving the RMB towards London is not a unilateral
intention of China. The UK and London are extremely eager for offshore RMB and
have shown enthusiasm beyond the market’s expectations. On several public
occasions, senior officials of the UK and the City of London vowed to build a main
offshore RMB trading center. The UK Chancellor of the Exchequer George
Osborne said in public that making London become the Western center in thisfield
so as to bring many benefits to our economy is an ideal of the UK Government. The
UK’s largest bank, HSBC Holdings, issued RMB bonds in London in 2012,
expanding RMB business to European clients and sending a clear signal that
London endeavored to build an RMB offshore center.^7 In June, 2013, Sir Mervyn
King, Governor of the Bank of England and Zhou Xiaochuan, Governor of China’s
Central Bank, signed a three-year currency swap agreement of not more than 200
billion yuan (32.3 billion USD), which was thefirst agreement of this kind between
China and a major developed country. Ongoing rapid development of London as an
offshore RMB business center also mirrors gradually deepening cooperation in this
field between China and the EU to a certain extent.
7.2.2.2 Reform of the International Financial Governance Structure
China and other emerging countries are always committed to pushing ahead with
governance reform of internationalfinancial institutions and require more tranches
and voting power for emerging countries. More tranches which emerging countries
such as China, etc. desire to obtain are mainly transferred from European countries.
Thus, the EU poses resistance to and shows hesitation about reform of international
financial institutions. There are certain conflicts of interest in the area offinancial
governance between China and the EU. However, subject to pressure from the USA
and emerging countries, the EU has made certain concessions; for example, the EU
finally agreed to promote completion of the IMF tranche reform and give more
voting power to emerging economies and developing countries; and it was also
willing to give up part of the EU’s seats on the IMF Executive Board. However, a
recent proposal for IMF reform was vetoed by the USA, leaving this reform
unfinished.
(^6) http://finance.ifeng.com/news/special/jjgfh/20111105/4997444.shtml.
(^7) http://opinion.cb.com.cn/12714523/20130225/448488_2.html.
148 X. Hou