The Hong Kong Exchanges and Clearing Group (HKEx), whose companies include the London Metal Exchange (LME) and LME Clear Limited, announced today that LME signed a memorandum of understanding (MOU) with China Construction Bank Corporation (CCB) for strategic cooperation in the development of new products, joint publicity, marketing and other areas.
The signing ceremony was held in London when Chinese Vice Premier Ma Kai visited the LME on Thursday, September 2014, during his official trip to the United Kingdom for the sixth UK-China Economic and Financial Dialogue.
CCB Chairman and Executive Director, Wang Hongzhang, explained the importance of the move, he said: “China, as both the major global producer and consumer of base metals, now plays a critical role in the pricing of base metals internationally. As one of China’s most influential multinational finance companies, CCB aims to strengthen its cooperation with HKEx, LME and LME Clear, leveraging on our complementary strengths to establish a financial fast track channel for China’s broad swathe of mining, smelting and metal processing companies to access international commodities trading markets.”
“The signing of this strategic MOU builds on CCB’s recent designation as the official Renminbi (RMB) clearing bank for the UK. All parties to this MOU view it as a great opportunity to enhance R&D and marketing activities promoting the expanded use of the RMB for base metal trading, which in turn will boost the ongoing internationalisation of the RMB,” added Mr Wang.
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In a related move, it was recently announced that the Chinese commodity bourse, Shanghai Gold Exchange, plans to launch new precious metals contracts in the country’s free trade zone, allowing overseas investors to participate in the Chinese gold market.
“This agreement marks the beginning of our collaboration with CCB in the exploration of new products and services suitable for Mainland China, Hong Kong and other markets,” said HKEx Chief Executive, Charles Li. “The MOU is another demonstration of our determination to expand the LME’s business in Asia.”
“This MOU is an important step for the LME and CCB as we seek to combine our strengths to develop new products and services to complement our existing businesses,” said LME Chairman, Sir Brian Bender.
“The collaboration shows our commitment to expanding the user base of the LME and LME Clear by exploring RMB related opportunities,” added LME Clear Chief Executive, Trevor Spanner.