Hong Kong, London to sign China yuan deal By George Parker, FT.com January 16, 2012 -- Updated 0432 GMT (1232 HKT) (FILES) Dated November 12, 2010 filed photo shows an illustration of Chinese currency 100 yuan notes issued by the People's Bank of China, fronted with an image of former Communist party leader Mao Zedong and on the rear, the parliament building Great Hall of the People, in Beijing. The US Treasury cleared China of official accusations of currency manipulation February 4, 2011, but said progress toward allowing the yuan to appreciate was "insufficient." In a report to Congress, the Treasury said that China, eight other countries and the eurozone had not manipulated exchange rates "for purposes of... gaining unfair competitive advantage in international trade." "Based on the resumption of exchange rate flexibility last June and the acceleration of the pace of real bilateral appreciation over the past few months, " China's behavior did not qualify under the official definition of manipulation, it said in the long-delayed report. Hong Kong, UK agreement could turn London into off-shore yuan trade center Positions London to play important role in lifting yuan as a big global -currency (Financial Times) -- George Osborne will sign a deal on Monday with Hong Kong aimed at helping turn the City into an offshore trading centre for the renminbi, in what the chancellor sees as a vote of confidence in London. Mr Osborne believes the talks are proof that China sees London as a significant financial centre and gateway to the European single market, in spite of Britain's isolation at a Brussels summit last month. The chancellor will agree with Norman Chan, chief executive of the Hong Kong Monetary Authority, technical measures to help London play an important role in increasing the renminbi's standing as a big global -currency. The two men will set up a forum investigating synergies between the UK and Hong Kong, including looking at clearing and settlement systems, market liquidity and development of new renminbi-denominated products. The deal will give weight to attempts by Mr Osborne to ensure that new European Union regulations do not stifle the City. He argues that London is a large asset not just for Britain but as a financial centre serving the whole of the European Union. China has given its backing to London's ambitions to become a significant offshore renminbi trading centre; Hong Kong is the world's biggest offshore centre for the Chinese currency, acting as a gateway for the onshore market in mainland China. The Hong Kong Monetary Authority recently announced that it was to extend the operating hours of its renminbi payments system by five hours so as to facilitate better offshore trading with London, extending the window through which financial institutions in London can settle offshore renminbi payments. A Treasury official said: "The UK is the only European country to hold a dialogue at such a senior level with the Chinese government, and last summer's discussions followed on from an increase in UK goods exports to China in 2010 by 40 per cent to £7.6bn." The Treasury says London is the logical place for the market to expand to help deepen the renminbi market outside China and Hong Kong. British financial services companies are market leaders in what is a rapidly expanding field. For example, UK bank Standard Chartered launched the first ever renminbi corporate bond for McDonald's in 2010. Total Chinese trade settled in renminbi has increased from 0.7 per cent in the first half of 2010 to more than 9 per cent in the first half of 2011. Renminbi deposits in Hong Kong have increased from Rmb64bn in January 2010 to Rmb627bn in November 2011. Bank of China said it "strongly supports" London to be the next offshore renminbi trading centre, after Hong Kong, while Peter Sands, Standard Chartered's chief executive, said London had "a unique opportunity" that should not be missed. Stuart Gulliver, HSBC's chief executive, said: "Successful co-operation will support British businesses as they look east to the opportunities in Asia while supporting Asian businesses looking west to Britain as a natural home for trade and investment." January 15, 2012 -- Updated 1744 GMT (0144 HKT) Passengers from the Costa Concordia describe chaos and panic as their cruise liner ran aground off Italy's Mediterranean coast.