In September 1996 while I was Economic Secretary to the Treasury, I led a UK delegation to China. There, we signed a Memorandum of Understanding allowing Chinese companies to be listed on the London Stock Exchange for the first time. Sixteen years on, Chancellor George Osborne has opened the door for London to become the first off-shore Renminbi trading centre, a proposal that has received high-level public backing from Chinese authorities. Today, I spoke in the capital at a conference entitled “The Rise of the Renminbi”, discussing with fellow panellists what the coming of the currency could mean for the City of London.

There are potentially great benefits to be derived from establishing London as the exclusive financial centre trading for the renminbi outside Asia. There are the jobs, the tax revenues and the potential profits. China’s investors have an appetite for Europe, and the presence of a renminbi trading centre in London will only whet it further.

And of course, there are considerable positive implications for the City’s reputation. The backing of Chinese authorities has already recognised the high estimation of London – still the world leader on foreign exchange transactions and main provider of liquidity to Europe, the Middle East and Asia. China’s vote of confidence in the City must not be discounted by UK regulators as they draw the Square Mile’s parameters.

The role of the regulator is crucial to the success of this new prospect. We hope the Financial Services Authority will complete its due diligence on the Chinese regulator as soon as is practicably possible. This will allow Chinese firms to enjoy the advantage of being considered compliant with the rigorous standards set by the UK authorities and by the Bank of International Settlements in Basel. Levelling the field of regulation is a crucial element in Britain and China reaching a mutual recognition agreement of conformity. Such an agreement is key to securing this development for the City.

It is a development on which the private sector must take the lead: business is best placed to identify the regulatory pressure points and exciting opportunities made available through the establishment of London as a complement to Hong Kong, the home of the offshore renminbi market.

The City has always been involved in the development of emerging markets: in the 16^th century it was Muscovy; in the 18^th century India. And in the 19^th century, financiers built upon almost three centuries of trans-Atlantic adventure and founded the Scottish American Investment Trust to invest in the United States – the emerging market of its day. As Europe endeavours to resolve its problems, now is the time to reinforce those links with fields further off to make sure that the City holds its place as the leading centre for international finance.