China and Germany have formally agreed to establish a Frankfurt-based exchange to trade a host of renminbi-denominated products, in a further sign of Europe’s aggressive courting of Beijing for financial business.

Angela Merkel, Germany’s chancellor, and China’s premier Li Keqiang attended the signing of the agreement in Beijing yesterday between Deutsche B?rse, the Shanghai Stock Exchange and China Financial Futures Exchange to set up Ceinex.

The deal comes days after UK prime minister David Cameron rolled out the red carpet for Chinese president Xi Jinping in a charm offensive British officials are hoping will advance their aim of making the City of London a hub for trading products denominated in the Chinese currency. On the first day of Mr Xi’s visit, China issued its first sovereign bond from London.