Consul General Caroline Wilson spoke to industry experts the London Stock Exchange’s Greater China Forum on the theme of the case for closer ties between UK and China capital markets
On 15 June, British Consul General to Hong Kong Caroline Wilson was pleased to address the London Stock Exchange’s (LSE) Greater China Forum for the second year running.
The Consul General reflected on a busy year since she last spoke to the Forum for the RMB market and China’s capital market reforms, stressing that this remains a key priority for the UK Government.
The RMB market continues to grow, and has grown somewhere in the region of 50% since this time last year. From a UK perspective, our story as an RMB hub is still very positive, and the new British Government as committed as ever. The same Chancellor - who recognises the importance of Hong Kong to London’s success as an RMB market and sees that market’s growth as the most important event in global capital markets of the 21st Century – still sits in no. 11 Downing Street.
She outlined the leaps forward London has made in this market during 2014-15 to ensure its place as the second global RMB hub after Hong Kong remained in no doubt:
the appointment of China Construction Bank in London as the first RMB clearing bank outside of Asia
the issuance of the first sovereign RMB-donominated bond outside of Greater China was issued to finance the UK Government’s debt
the expansion of weighty Chinese institutions in London – ICBC and CCB became the first Chinese banks to open a wholesale branch in London since the founding of the People’s Republic of China
and finally, the UK’s decision in April to become the first major western country to join the new Asian Infrastructure Investment Bank
Given the 2015 Forum’s focus on accessing China’s capital markets, the Consul General went on to outline the “case for greater links between UK and China capital markets; and how Chinese and global investors alike might capitalise on these closer ties.”
First, there is the strength of the UK’s track record as a Global Financial Centre. London is among the most established and globally-oriented international financial centres in the world… Secondly, London is established as the world’s second RMB trading centre. London is already a truly global centre for RMB finance…Thirdly, the RMB ecosystem in London is thriving. There has long been a wide variety of products and services available in RMB in London, something which the LSE has been pivotal in developing.
She also offered her congratulations to LSE on the news, announced at the conference, that SFC has granted a license that will allow Hong Kong firms to trade directly on LSE’s markets. Of this new link, Caroline Wilson said:
…[this is] a fantastic example of how London and Hong Kong can work together to facilitate greater access between China and Europe’s capital markets…This is great news: for LSE; for Hong Kong firms who have been demanding this link for sometime; for UK-China financial links; and for London as an RMB hub.
The Consul General closed by explaining to delegates that the UK has several key UK-China and UK-Hong Kong bilateral events coming up this year that should allow the UK to “seize the moment to make further strides in the RMB market”. These are the State Visit of President Xi Jinping to London (the first such visit since 2004); the annual UK-China Economic and Financial Dialogue in the autumn; and the London-Hong Kong RMB Forum towards the end of the year. She concluded that:
…we are confident that…[the UK] will emerge with new announcements that will underscore the UK’s place as the globe’s second RMB centre, and reconfirm our close partnership with both Hong Kong and China.
Read the Consul General’s speech at LSE Greater China Forum Hong Kong in full
If you would like to know more about the UK as an international financial centre, its role in supporting the opening up of China’s capital markets and the internationalisation of the RMB or if you are interested in investing in the UK, please contact Kathleen Poon and Andy Burwell