China’s ambassador to the U.K. has outlined plans for closer ties between the countries in fund management and banking.
In a speech delivered Friday to delegates at the annual City Week conference at London’s Guildhall, Ambassador H.E. Liu Xiaoming said Chinese plans to further open its financial services market will present a significant opportunity to the U.K. financial sector. China is seeking to strengthen its economic bond with Britain as the U.K. prepares to leave the European trading bloc.
“China and the U.K. can co-ordinate in asset management, banking, insurance and pensions and, based on such co-operation, we can play a leading role in developing green finance, fintech and so on,” he said.
China has been seeking to expand its global influence, partly through its “Belt and Road” trade initiative, which is an attempt to increase economic and commercial partnerships across more than 60 countries through infrastructure development. Asset management firms, meanwhile, have been quick to seize on opportunities emerging from an increasingly global Chinese outlook.
At the start of the year, Fidelity International became the first foreign asset manager granted permission by the Chinese government to offer financial products locally. Invesco and Neuberger Berman followed with their own offerings in China.
“Finance is a lifeblood of the modern economy and growth only comes when the blood circulates,” Ambassador Liu said. “China has firmly committed to opening up to the world and opening up its financial services market.”
Because the Chinese private funds market has maintained strict controls over foreign market entrants, asset managers typically have partnered with local firms to gain a toe hold. Fidelity, for example, had been operating in China through a partner arrangement under the qualified domestic institutional investor program until its announcement at the start of the year.
In March, the Asia Securities Industry & Financial Markets Association urged the Chinese government to develop a closer dialogue with institutional investors in the continued development of its financial markets.
The group said that “streamlined and simplified market access programmes would lower the costs and risks of investing in China and enhance the attractiveness of Chinese investment products to international asset managers.”
Ambassador Liu said Friday that China would move to introduce measures to make foreign direct investment easier, while acknowledging the current global wave of protectionist policies that some have interpreted as a move away from cross-border trade initiatives.
“The world economy has gone through a few years of sluggish growth, increasing anti-globalization and rising protectionism,” he said. “Now is a crucial stage for world development. As the Chinese saying goes ‘walk fast, walk alone; walk far, walk together.’”
Speaking May 25 at the City Week conference, Andrew Parmley, Lord Mayor of London, said London was the natural end to the Belt and Road Initiative.
“We are Europe’s gateway to finance. We have facilitated growth for business across the continent,” Parmley said. “We have ties that I see as unbreakable.”
Parmley’s comments echoed remarks made by U.K. Chancellor Philip Hammond when he visited Beijing earlier this month.
“I support President Xi’s target to have mutually beneficial Free Trade Agreements in place with 40 percent of Belt and Road countries by the end of this year,” he said in a May 14 speech.