The United Kingdom and China signed an agreement on Monday to work on setting up a clearing and settlement service for renminbi transactions in London, following the signing of a similar agreement between Germany and China on Friday.

The two agreements highlight fierce competition between European financial centers to take advantage of the renminbi's internationalization.

"The agreements both Britain and Germany signed with China show that European powers are keen to engage in opportunities arising from the renminbi's internationalization," said Andrew Carmichael, a partner at the London-headquartered law firm Linklaters.