RQFII program 'turning point' for China, Britain

London's investors should make the most of new opportunities to invest in China's stock and bond markets through the Renminbi Qualified Foreign Institutional Investors program, said Sajid Javid, the UK's Financial Secretary to the Treasury.

"I expect the awarding of RQFII in London to be a major turning point in London's position as a renminbi hub and to the development of offshore renminbi," Javid said.

"I spent a lot of time urging UK asset managers to take this opportunity," Javid said, adding that he hopes the first RQFII license to a London investor will be given by the end of the year.

China launched the RQFII program in 2011 as part of an effort to open up the country's capital accounts and promote the renminbi's internationalization. Starting as a pilot program in Hong Kong with 20 billion yuan ($3.3 billion), China's RQFII quota was expanded to 270 billion yuan by the end of 2012.

The RQFII program was extended to London last month, when British Chancellor of the Exchequer George Osborne visited China for the UK-China Economic and Financial Dialogue. China's RQFII quota to London's investors is currently 80 billion yuan.

Javid said the RQFII quota greatly contributes to the UK's competitive position as a leading asset management hub.

He said when he accompanied Osborne to China last month he focused on building links between China an d the UK's asset management companies.

"So I was pleased that we agreed that the UK was the investment management center of choice for Chinese firms. I hope to see Chinese banks expand into the UK in the near future, and I hope to see Chinese asset management firms working with UK partners opening offices in London," Javid said.

Javid stressed the importance of Chinese financial institutions, such as banks, being in London, as they will help the city achieve its goal of becoming an offshore renminbi hub.