The City must build on its relationship with China to remain the world’s financial centre
Each week seems to bring another vision of how our post-Brexit relationship with Europe might look. Is the EEA an option? What has to be done in order to secure access to the Single Market?
As lord mayor of London, it is my responsibility to work with the government and other key institutions to ensure that Brexit doesn’t affect London’s position as the world’s leading financial centre. It is that responsibility that leads me to China, where I am now, to promote our vital partnership with this growing economy.
Business here wants to know about the referendum above any other topic. I’m being asked questions that don’t yet have answers, about what things will look like in two, five, 10 years’ time.
But what I do know, and what I am making crystal clear, is that the UK, more than ever, is open for business.
London’s position as the world’s leading financial centre hasn’t developed by accident. For one thing, our time zone allows us to trade with both North American and East Asian markets in the same day. Our regulatory environment is supportive of startups, with 991 new businesses registered in the Square Mile in 2015. London is also home to a vast number of young, flexible and talented workers drawn from across the world. Importantly for investors such as Chinese corporations, the UK has a history of stable government and consistent rule of law.
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One particularly successful area of UK-Chinese collaboration is the clearing of renminbi in London. The renminbi is one of the most widely-used world payment currencies, joining the ranks of the dollar, euro and sterling, and London is now its second largest offshore clearing centre. This is a tremendous economic partnership between our two countries – one that has involved a great amount of work and dedication on both sides, in particular from the City. As a result, London now hosts the European HQs of China’s five biggest state-owned banks.
Green finance is another area where China and the UK can develop close cooperation. China will use its presidency of the G20 this year to address the universal issue of climate change, and in London we have listed increasing numbers of green, RMB-denominated products in support of China’s global green finance ambitions.
The UK and China have been working jointly to develop green financial markets worldwide and are the co-chairs of the G20’s Green Finance Study Group. The findings of this study group are due to be released next week. Members of Canada’s Green Finance Initiative are keen to further strengthen this partnership and continue the globalisation of green markets.
Over the coming years, we in the City will look to build upon our already solid relationship with China. I firmly believe that the UK will remain China’s number one Western partner and its gateway to Europe. We will continue to support Chinese business expansion and tighter links between our financial services firms. The closer we work with our Chinese friends and partners, the greater prosperity our countries will share – regardless of the precise details of Brexit.