London builds on historic links with Asia In bidding to become a leading trading centre for the renminbi, London will hope to build on more than 150 years of close ties between the City and Asia. Two of the UK's biggest banks - HSBC and Standard Chartered - have their origins in Asia and continue to generate most of their profits in the region. The Chartered Bank of India, Australia and China - one of the antecedents of Standard Chartered - was set up in 1853 to finance trade between British-ruled India and other parts of Asia, including Shanghai and Hong Kong. Much of the bank's early business related to the opium trade - which had been forcibly imposed on China by Britain in the first opium war of 1839-42. A second war followed, and British forces" burning of Beijing's Summer Palace was still a recent memory when HSBC was founded in Hong Kong and Shanghai in 1865. At the late-19th century peak of the British empire, the banks grew rapidly by financing trade in commodities such as tea and cotton both within Asia and between Europe and the east. The banks went on to expand in other parts of the world, but continue to focus heavily on Asia - while keeping their corporate headquarters in London. Yet Hong Kong's recent statement that it would "absolutely welcome" a decision by the banks to move their head offices to the territory reflected a widely perceived eastward shift in the financial world's balance of power. The British banks have been overtaken in terms of assets and market capitalisation by Chinese rivals such as Industrial and Commercial Bank of China, now the world's largest bank. Meanwhile, with gunboat diplomacy no longer an option, London must now compete with rival financial centres as a marketplace for Chinese financiers, as it continues to seek the Asian profits which helped build the City's success.