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The London Metal Exchange (LME) and LME Clear signed a Memorandum of Understanding (MoU) on 21 October 2015 with a group of Chinese and UK financial institutions in support of China’s ‘The Belt and Road’ initiative.
The other parties signing the MoU were Industrial and Commercial Bank of China Ltd, China Construction Bank Corporation, Bank of China Ltd, Agricultural Bank of China Ltd, China Merchants Securities International Co Ltd, GF Financial Markets (UK) Ltd and Standard Chartered Bank. The China-Britain Business Council and China Chamber of Commerce in the UK also support the venture.
"This MoU further shows our determination to provide a bridge between China and the rest of the world. We’re making it easier for Chinese participants to engage in the LME’s price-discovery process, ensuring that China’s significant presence in metals is better reflected in global pricing,” said Garry Jones, CEO of the LME.
The signatories pledged to use their expertise in risk management and funding along the initiative’s trading routes to give Chinese participants greater access to the global commodities markets. The parties also plan to contribute to the internationalisation of the Chinese renminbi by building on facilities such as LME Clear’s recently launched RMB collateral service.
“This MOU in support of ‘The Belt and Road’ strengthens the links between China as the world's largest metal producer and consumer, and London as the financial and trading centre of the global metals market,” said Trevor Spanner, CEO of LME Clear.
The ‘Silk Road Economic Belt and the 21st-century Maritime Silk Road’ initiative was launched by Chinese President Xi Jinping in 2013 and aims to create new trading routes between China, Asia and Europe. The infrastructure projects initiated under the strategy have increased global demand for base and ferrous metals.
Background:
The MOU was signed by:
- Garry Jones, CEO of the LME;
- Trevor Spanner, CEO of LME Clear;
- Mingqiang Bi, Chairman of ICBC Standard Bank Plc;
- Biao Li, Chairman of China Construction Bank (London) Ltd;
- Ruoming Hua, General Manager of the Financial Market Department, Agricultural Bank of China Ltd;
- Liang Xiao, Deputy General Manager, Bank of China Ltd London Branch;
- Stephen Chan, Chairman of China Merchants Securities UK;
- Edward Shi, Managing Director of GF Financial Markets;
- Richard Holmes, CEO Europe, Standard Chartered Bank;
- Stephen Phillips, Chief Executive of the China-Britain Business Council; and
- Lei Jiazhao, Deputy Chairman of the China Chamber of Commerce UK.
The signing was witnessed by:
- Charles Li, CEO of Hong Kong Exchanges and Clearing;
- Sir Brian Bender, Chairman of the LME;
- Jin Xu, Minister Counsellor at the Chinese Embassy in London;
- Sherry Madera, Minister Counsellor at the British Embassy in Beijing;
- Lord Sassoon, Chairman of the China-Britain Business Council;
- Mark Boleat, Chairman, Policy and Resources Committee, City of London Corporation; and
- Robert Ward, Deputy Director of Global Financial Markets, HM Treasury.
