On Oct. 21, 2014, Ambassador Liu Xiaoming attended the opening ceremony of London Stock Exchange to celebrate the launch and listing of UK government RMB bond at the invitation of the HM Treasury. [File photo]

Actually, the first RMB debt issues in London - about RMB 2 billion of Renminbi bonds - have already been issued by the Chinese Development Bank. Last year, the U.K. government also issued a RMB 3 billion sovereign bond, which made London the first in the West to do so.

However, these moves were just a prelude for what Prime Minister David Cameron has described as the "golden year" of bilateral relations.

To Cameron and his Chancellor George Osborne, China's RMB sovereign debt in London is a culmination of a longstanding effort to establish an edge over the U.S. and European rivals in attracting Chinese investment. Chinese President Xi Jinping's trip was preceded by Osborne's visit to China last month, when he opened bidding for the ￡11.8 billion High-Speed Two (HS2) rail link contracts.

To President Xi Jinping and Premier Li Keqiang, the issuance of RMB sovereign debt in London means rising momentum in longstanding efforts to make Renminbi a major international reserve currency in the near future.

The world's third largest bond market

Only a decade ago, China's bond market was still relatively small and barely known internationally. In the past few years, however, Beijing has carefully nurtured a large and increasingly diverse bond market that features both public and private debt.

Today, China's bond market is the third largest in the world, trailing right after the United States and Japan. In brief, it's "the largest market you haven't heard of."

The growth of China's bond market has been dramatic. Starting from US$ 58 billion in 1997, it soared to US$5.3 trillion in the first quarter of 2015, which translates to a compound annual growth rate of 38 percent.

Currently, the Chinese market includes four major kinds of bonds, including government bonds, central bank notes, financial bonds and (non-financial) corporate bonds.