Chancellor George Osborne says Britain and China will “stick together” as he aims to make the UK China’s primary base of finance in the West, and is also looking at linking the two country’s stockmarkets.
During a trade trip in a speech to the Shanghai Stock Exchange, Osborne said that the recent market falls in China and subsequent moves by the Government to prop up markets and devalue its currency should not put the UK off tighening ties with the country.
“Whatever the headlines, regardless of the challenges, we should not be running away from China,” says Osborne. “Quite the opposite: we should run towards China.”
The two countries are looking at the feasibility of linking stockmarkets, to provide more liquidity for Chinese market. The move could give greater access to Chinese markets for UK investors.
Osborne said he chose “the epicentre of the volatility in financial markets this summer” to tie the two countries together.
The moves have already borne fruit, with China issuing short-term renminbi debt to the UK – a first outside of China. Osborne said the move showed that the UK was ”China’s bridge into western markets”.
“And make no doubt about it, I want the UK to be the natural Western hub for renminbi trading,” he said. The UK already issued renminbi-denominated bonds last year.