Global gateway: The City can cross the Brexit river by feeling the Chinese stones

Catherine McGuinness
London Prepares To Celebrate Chinese New Year
The Chinese Finance Ministry will soon be relaxing rules in the country’s financial sector, allowing foreign firms to own a controlling stake in ventures for the first time (Source: Getty)

The reformist Chinese leader Deng Xiaoping famously described the process of China opening-up to the world as “crossing the river by feeling the stones”.

Following a week-long trip to China, I can’t help thinking that this saying can also be used to describe how businesses in the UK are feeling in the lead-up to Brexit.

I’ve been in the Far East talking to senior figures in the Chinese finance sector, including leaders of banks and investment firms with huge business interests in the UK.

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My visit follows an announcement by the Chinese Finance Ministry in November that it will be relaxing rules in the country’s financial sector, allowing foreign firms to own a controlling stake in ventures for the first time.

This development is potentially huge for UK companies wanting to enter China, and a welcome step in bringing much needed competition into China’s financial market.

The City of London Corporation has long recognised the importance of building relations with China. Since 2008, we’ve had representative offices in Beijing and Shanghai, both of which celebrate a decade in market next year.

Back in the UK, more than 30 Chinese financial institutions are now based the City – some for a very long time. Several others are in the process of opening a representative office.

These companies have an important role to play. Not only do they bring much-needed capital to the UK and create thousands of British jobs, they also have expertise and skills which will continue to support the City of London’s position globally.

Alongside other representative bodies for the UK financial and professional services sector, we’re now working hard to ensure the British government agrees the best Brexit deal for these firms, and all the others located in the Square Mile.

For us, this means three things, namely access to talent, a transitional agreement, and the closest possible access to the current trade frameworks.

In China, I’ve met with concern from many stakeholders over the uncertainty that Brexit poses. That’s why I’ve also been delivering another important message: that London’s strengths as an international financial centre remain, and will continue to do so after we leave the EU.

No matter the result of the negotiations with Brussels, we will carry on serving as a gateway to global markets, and as a springboard to help companies expand their business internationally.

Looking towards the ninth UK-China Economic and Financial Dialogue later this month in Beijing, which I will be attending, we should also reflect on London’s potential offer in the Belt and Road Initiative – a development strategy initiated by the Chinese government to build new links between east and west, and one that could be worth billions of pounds to the UK economy.

As we leave the EU, it is initiatives like this that London will need to support, especially if we are to retain our position as the world’s leading global financial centre. I am confident we will. But this will only be possible by continuing to work closely with international partners like China, and ensuring that they continue to feel welcome in our City.

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City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.

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