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Rachel Reeves wants to breathe new life into a scheme linking the London and Shanghai stock exchanges, as she touted financial services as a “highlight” of Britain's economic ties with China on Saturday.
The Chancellor will call for greater cooperation between Britain and China on bonds, pensions and capital markets as well as asset management as she seeks to resume dialogue after a more than five-year hiatus in high-level British visits to the country.
The UK government senses an opportunity to strengthen financial services ties with China, as Donald Trump prepares to become US president after promising to adopt a tougher line with Beijing, according to financial experts familiar with the trip.
However, Reeves' preparations for a three-day visit to Beijing and Shanghai were overshadowed by the sell-off in bond markets that drove Britons this week. Borrowing costs to its highest levels since the 2008 financial crisis. Opposition conservative politicians called on her to cancel the trip.
“We are witnessing an economic chaos of Rachel Reeves' making, with the continuing effects of her disastrous budget. However, it is astonishing that she has chosen to get on the plane rather than stay put and try to get things under control.”
He added: “The Chancellor must return to the United Kingdom urgently.”
Speaking before the trip, Reeves She said she would find “common ground on trade and investment while being frank about our differences and supporting national security as this government's first duty.”
“We can build a long-term future,” she added economic “The relationship with China works in the national interest.”
The City of London is suffering from a dearth of initial public offerings amid a steady stream of UK-listed companies taking their listings to other countries or going private.
Banking executives hope that Chinese companies that previously sought to list in the United States will instead choose to sell their shares in London if relations between Washington and Beijing worsen.
Shen, the Chinese online fast fashion retailer, filed confidential documents with UK and Chinese regulators last year for an initial public offering in London with a planned market value of £50bn.
This has raised hopes among financiers that other Chinese companies could follow suit, despite controversy over allegations that Shen uses forced labor as part of its cotton supplies from China's northwestern Xinjiang region.
Nikhil Rathi, chief executive of the Financial Conduct Authority, is accompanying Reeves on the three-day trip and could discuss Shein's listing plans with his counterparts in Beijing. David Schwimmer, CEO of the London Stock Exchange, also participates in the delegation.
Officials said Reeves saw the meetings as an opportunity to boost financial services exports to China, given that they currently represent a small fraction of those destined for the United States and the European Union.
The equity line between Shanghai and London was launched to great fanfare in 2019, but has struggled to gain traction since then. Its aim was to encourage Chinese and British companies to list their shares in each other's countries.
But this was done by only six Chinese companies, raising $6.6 billion, in addition to British companies, while trade was silent. The Chancellor hopes to make such dual listings between the UK and China easier.
The visit marks a revival of the China-UK Economic and Financial Dialogue, an annual set of bilateral talks that have been suspended since 2019 due to the COVID-19 pandemic and deteriorating diplomatic relations.
During her visit, Reeves will visit the Beijing store of British bicycle maker Brompton and meet executives from other British companies based in China, including Jaguar Land Rover, Unilever and Diageo.
HSBC Chairman Mark Tucker, who is leading the business delegation, and Standard Chartered Bank Chairman Jose Viñals, are among the senior bankers in the City of London accompanying a major Chinese operation this week.
Bank of England Governor Andrew Bailey is also participating in the trip, along with Baroness Shriti Vadera, Chairman of Prudential Insurance, Sir Douglas Flint, Chairman of Fund Manager Aberdeen, and Richard Oldfield, Chairman of Schroders Asset Management.
