Brexit or not, London will stay open for Chinese business
Gordon Innes says the Brexit vote has given the UK the chance to forge stronger trade and investment links with countries outside the European Union, and China is a priority
President Xi Jinping’s (習近平) first state visit to the UK last year was proof that China is one of London’s and the UK’s most important trade and investment partners. But in the wake of the British vote to leave the European Union, questions have arisen around how this relationship could change.
The short answer is: London will remain an international business centre which is open for Chinese business.
In fact, Britain’s chancellor of the exchequer, George Osborne, met senior Chinese officials in London on July 6 and will shortly attend the G20 finance summit in Chengdu (成都) to foster stronger ties between the two countries and reassure business leaders that the UK sees China as one of its most important trading partners.
The long-term success of a global trading city is built on strong foundations of openness, innovation and the ability to attract skilled workers and investment. These qualities have been established over hundreds of years and none of that has changed for London in the past few weeks.
London remains the No 1 capital city for Chinese investment outside Asia over the last decade.
In the past few years, London & Partners has helped dozens of Chinese businesses invest in and move to London. We have seen great interest from Chinese companies in London’s creative industries, its world-class science base, its global financial trading hub and its transparent property market. Recent examples include the acquisition by Greenland Holding Group of redevelopments in south London and Canary Wharf with a total value of £1.2 billion (HK$12.1 billion).
Recognising the strength of London’s high-growth tech companies, Chinese investment group Cocoon Networks recently launched a £500 million (HK$5.06 billion) London-based venture capital fund aimed at investing in UK and European tech start-ups. London’s status as a world-class technology hub has also attracted a large influx of Chinese companies. London & Partners has helped tech giants such as Huawei and Deya Tech establish a presence in the capital, while Advanced Merchant Payments is also taking advantage of London’s booming fintech sector.
Investors, visitors and students should be reassured that London will remain open, cosmopolitan, welcoming and a highly attractive destination. The UK will remain a member of the EU until negotiations about the country’s exit have concluded. That could take at least two years – if not considerably longer.
It would be foolish to pretend that the result of the referendum has not created a degree of political, and resulting economic, uncertainty. However, I remain highly positive about London’s future.
London’s success is vital to both the UK and the EU. It accounts for 20 per cent of the UK economy and, if it was a country, it would be the EU’s fifth largest economy. It is Europe’s financial and professional services centre and its largest technology hub. So it is crucial to both the EU and the UK that London continues to thrive and have close economic ties with Europe.
London has been a global financial centre for many decades and leading bankers have recently expressed their confidence that this will not change. While there may be some changes in activities, we do not foresee a decline in the number of financial institutions in London. We are the largest foreign exchange centre in the world and the second largest offshore renminbi trading centre worldwide, after Hong Kong.
Moreover, global financial services companies, such as HSBC and Barclays, have recommitted to London since the referendum. They have given a large vote of confidence in the city’s position as a global financial hub. Equally, Huawei Technologies has pledged to go ahead with the rest of its five-year £1.3 billion (HK$13.16 billion) investment in Britain.
The Brexit vote will give the UK an opportunity to forge stronger alliances with cities and countries outside the EU – and that is something the mayor of London, Sadiq Khan, is making a priority. As the chief executive of the mayor of London’s economic development agency, I look forward to welcoming Chinese investors to London for many years to come.
Gordon Innes is chief executive of London & Partners