What does Brexit mean for China?

A $100 banknote is placed next to 100 yuan banknotes in this October 16, 2010 file illustration picture taken in Beijing. [Photo/Agencies]

Offshore RMB centers boosted

The status of Frankfurt, Luxembourg and Paris as offshore renminbi centers will improve significantly after the United Kingdom voted to leave the European Union, experts said.

Wen Bin, chief researcher at China Minsheng Banking Corp, said the status of London as a global financial center will be weakened after Britain withdraws from the EU.

"It will trigger an increase in the size and volume of cross-border renminbi transactions at the other three offshore renminbi centers in Europe, which will replace London, while China is pushing forward such transactions under the framework of the Belt and Road Initiative," Wen said.

He expects the renminbi to fall slightly against the US dollar but to remain relatively stable against a basket of currencies.

Zong Liang, deputy director of the Institute of International Finance at the Bank of China, said the British exit will also lead to Chinese banks that are expanding their business worldwide to readjust their global strategies by accelerating deployment in countries such as Germany and France.

Wen agreed, saying that huge business opportunities will emerge for Chinese banks in Europe, whereas their business in London may slow.

Sun Yu, president of Bank of China's London branch, said: "The Brexit will bring uncertainties to ... large international banks. Its impact on London as a world financial center will affect the future strategy of banks. Previously, all European banks used London as their business hub."