The UK and China have committed to a series of new financial partnerships including the establishment of a fintech ‘bridge’, the Treasury has announced.
Following the eighth UK-China Economic and Financial Dialogue (EFD), Chancellor Philip Hammond and Chinese Vice Premier Ma Kai revealed a series of new measures which are intended to strengthen financial ties between the two countries.
One of these measures involves the creation of a UK-China fintech bridge, which should strengthen regulatory co-operation and boost reciprocal market access for both UK and Chinese fintechs.
“We are delighted to be signing a co-operation agreement with the People’s Bank of China, which will underpin a UK-China fintech bridge,” said Andrew Bailey, chief executive of the FCA. “The co-operation agreement will allow us to share information about financial services innovations in our respective markets, including emerging trends and regulatory issues.
“We hope that by strengthening links between the regulators, barriers to entry will be reduced and innovation encouraged in both countries’ financial services sectors.”
The two countries have also agreed to progress with the London-Shanghai Stock Connect, a long-term strategic plan for UK-China financial services cooperation. The plan lays out a series of ways in which China and the UK work more closely together across eight key areas: capital markets; asset management; insurance and pensions; banking; green finance; China’s Belt and Road Initiative; financial inclusion; and fintech.
“Britain is open for business and we are strengthening our economic and financial ties with China, one of the world’s fastest growing economies,” said Hammond. “London-Shanghai Stock Connect is the first of its kind and it will further strengthen the financial ties between China and Britain, home to the world’s leading financial centre.
“It will bring mutual benefits. For the UK, the initiative will help to cement London’s position as the leading financial centre and open up new sources of investment. The initiative also marks an important milestone for China as it continues to open up its markets and liberalise its economy.”
During the most recent EFD talks, China also agreed to grant qualified British banks a licence to act as lead underwriters of panda bonds issued in China, and it has promised to gradually raise the limit to foreign ownership of UK and foreign securities and mutual fund companies. Furthermore, a number of Chinese firms and financial institutions are set to open new offices in London, including China Life, China’s largest life insurer.