Rachel Reeves, the UK Chancellor, has embarked on a mission to revitalise the connection between London and Shanghai stock exchanges during her groundbreaking visit to China this weekend. The trip marks the first high-level UK diplomatic engagement with Beijing in more than five years.
The Chancellor’s three-day visit to Beijing and Shanghai comes amid significant market turbulence, as British borrowing costs reached their highest levels since the 2008 financial crisis. Despite calls from Conservative opposition to cancel the trip, Reeves remained steadfast in her commitment to strengthening Anglo-Chinese financial relations.
Upon arriving in Beijing, Reeves emphasised that the fiscal rules outlined in her October Budget were “non-negotiable”. The Chancellor, who visited a Beijing outlet of British bicycle manufacturer Brompton, expressed her intention to “unlock tangible benefits for British businesses” whilst maintaining access to the world’s second-largest economy.
The City of London has experienced a notable decline in initial public offerings, with numerous UK-listed companies relocating their listings elsewhere or transitioning to private ownership. Banking executives are optimistic that Chinese companies, previously focused on US listings, might pivot towards London, particularly if Washington-Beijing relations deteriorate further.
The Shanghai-London stock connect, launched in 2019, has struggled to gain momentum, with only six Chinese companies raising $6.6bn and experiencing limited trading activity. No UK companies have yet participated in the scheme. Reeves aims to simplify these dual listings between the UK and China.
The delegation includes prominent figures such as Financial Conduct Authority chief executive Nikhil Rathi, London Stock Exchange CEO David Schwimmer, and Bank of England governor Andrew Bailey. Representatives from major British companies operating in China, including Jaguar Land Rover, Unilever, and Diageo, will also participate in discussions during the visit.
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