China dishes out 80 billion RMB RQFII quota to Germany
09 July 2014
Category: News, Asia, China, Global, Europe, Germany
By Daniel Shane
China has awarded Germany a quota of 80 billion RMB (US$12.9 billion) under its RQFII foreign investor scheme.
The announcement of the quota coincided with a visit by German Chancellor Angela Merkel to the country, where she met with President Xi Jinping and Premier Li Keqiang.
The German financial centre Frankfurt is competing with other European jurisdictions, including London, Paris and Luxembourg, to become the continent’s top offshore RMB hub.
Both Paris and London have similarly been awarded 80 billion RMB quotas for the RQFII programme.
Germany’s central bank in March this year also agreed to co-operate with the People’s Bank of China (PBoC) on the clearing and settlement of RMB transactions. The European Central Bank, based in Frankfurt, last year also agreed a 350 billion RMB swap line with China.
Following the agreement between the PBoC and the Bundesbank earlier this year, Frank-Oliver Wolf, global head of cash management and international business at Germany’s Commerzbank, said: “The establishment of an RMB clearing hub in Frankfurt signifies a real business development – particularly for medium-sized exporting companies, such as machinery producers, which will now be in a position to settle directly in RMB via their local market.”