BRITAIN’S relations with China may be at a low ebb but China Construction Bank Corp.’s City of London outpost is banking on ever closer financial flows between the two countries. The branch is the sole yuan clearing bank in the U.K., making it an essential conduit to potentially staggering flows of Chinese money and investment. It has cleared some 64 trillion yuan (US$10 trillion) in transactions since 2014 — the largest volume outside of Asia — and its top U.K. executive is planning for growth. Yang Aimin, who has run the U.K. operations of China Construction Bank (CCB), China’s second-largest lender, since 2018, said in an interview last week he is targeting double-digit clearing volume growth in 2022 after it grew 18 percent last year to 11.9 trillion yuan. He’s also expecting the business of servicing Chinese companies listed in London to grow. “Hong Kong has embarked on a path that can be largely replicated by London,” he said, noting the existing Shanghai-London Stock Connect —which enables Chinese firms to list in the U.K. and vice versa — could ultimately open the door to a similar arrangement for trading bonds. His ambitions are good news for the City of London, which is looking to burnish its credentials as the international finance center of choice now it sits outside the European Union. The U.K. has long sought to lure Chinese investment, a process that started in earnest in 2014 with a deal allowing CCB to facilitate offshore yuan clearing in London and the issuance of a 3 billion yuan bond in London in 2016, the first sovereign yuan bond issued outside of the Chinese mainland and Hong Kong. The mood music has soured somewhat in recent years, with British lawmakers growing increasingly wary of closer ties with China. But Yang remains hopeful on the outlook for closer financial ties, saying one way the U.K. could encourage more investment is to allow yuan bonds to be accepted as collateral in U.K. markets. That could bolster the amount of yuan holdings and promote more trading in all types of yuan assets. “We have discussed the collateral inclusion many times with U.K. authorities over the years, I hope they can feel our sincerity and act quickly,” the 56-year-old Harvard graduate said. CCB provides foreign exchange and clearing services to the four Chinese listings in London, including Huatai Securities Co. and China Pacific Insurance Group Co., and Yang would welcome more dual listings in London, although other options are proliferating. Last month, the China Securities Regulatory Commission announced an extension of the stock connect program to eligible listed companies in Germany and Switzerland, paving the way for such listings elsewhere in Europe. London remains a relative minnow when it comes to offshore yuan trades. Hong Kong dominates with three quarters of the market with the U.K. in second place on 6.6 percent, ahead of Singapore’s 3.3 percent share, according to data compiled by the Society for Worldwide Interbank Financial Telecommunication. (SD-Agencies) | 