U.K. Chancellor Discusses Opportunities for Sino-British Economic Cooperation (AI Translation)
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文｜财新周刊 王力为
By Wang Liwei, Caixin Weekly
现年45岁的英国财政大臣蕾切尔·里夫斯（Rachel Reeves）于2024年7月英国工党赢得大选后，成为全球第六大经济体的掌舵人，肩上的担子颇重。
Rachel Reeves, the 45-year-old British Chancellor of the Exchequer, became the head of the world's sixth-largest economy after the Labour Party won the general election in July 2024, bearing significant responsibilities on her shoulders.
与美国之外的多数主要经济体类似，英国近来经济增长疲弱，2024年三季度录得零增长。尽管2024年全年，在主要货币中，英镑和人民币相对美元贬值最少，但在美元持续强势下，英镑兑美元汇率在2025年1月13日跌至两年低位。在美国候任总统特朗普的关税威胁下，美国通胀预期高企，叠加对英国债务率的担忧，英国10年期国债收益率近日达2008年以来最高水平。
Similar to most major economies outside the United States, the United Kingdom has experienced weak economic growth recently, recording zero growth in the third quarter of 2024. Although the British pound, along with the Chinese renminbi, depreciated the least against the U.S. dollar among major currencies for the whole of 2024, the pound's exchange rate against the dollar fell to a two-year low on January 13, 2025, amidst the continued strength of the dollar. Under the looming tariff threats from U.S. President-elect Donald Trump, U.S. inflation expectations have surged, combined with concerns over the UK's debt ratio, pushing the yield on 10-year UK government bonds to its highest level since 2008.
2025年1月11日至12日，里夫斯对中国进行正式访问，这是自2018年时任首相特雷莎·梅之后访华的英国最高级别官员。2024年7月英国斯塔默政府上台后，中英关系开始改善。当年11月，中国国家主席习近平与斯塔默在巴西G20峰会期间实现自2018年以来两国领导人间首次面对面会晤，确定重启中英经济财金对话。
On January 11-12, 2025, Reeves made an official visit to China, marking the highest-level visit by a UK official to China since former Prime Minister Theresa May in 2018. Following the formation of the Starmer government in the UK in July 2024, Sino-British relations began to improve. In November of that year, Chinese President Xi Jinping and Starmer held the first face-to-face meeting between the leaders of the two countries since 2018 during the G20 Summit in Brazil, where they agreed to restart the China-UK Economic and Financial Dialogue.
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- Rachel Reeves became UK's Chancellor in July 2024, as the Labour Party rose to power, amidst economic challenges like zero growth in Q3 2024.
- Reeves' visit to China rekindled the China-UK Economic and Financial Dialogue, achieving 69 collaborative agreements, including reducing investment barriers.
- UK-China relations are improving, with notable agreements like China's first RMB-denominated green bond in the UK by 2025, enhancing London's financial stature and bilateral trade opportunities.
[para. 1] Rachel Reeves, the 45-year-old Chancellor of the Exchequer, leads the UK's economy, the world's sixth-largest, following the Labour Party's election victory in July 2024. The UK has experienced zero economic growth in the third quarter of 2024, and the British pound hit a two-year low against the US dollar in early 2025. Rising inflation expectations and concerns about UK's debt ratio have elevated UK government bond yields to their highest since 2008.
[para. 2][para. 3] In January 2025, Reeves visited China to strengthen UK-China relations, which have improved since China's President Xi Jinping and UK's Prime Minister Starmer met in 2024. Reeves, alongside Chinese Vice Premier He Lifeng, led the 11th China-UK Economic and Financial Dialogue, reaching 69 achievements aimed at reducing investment barriers. This marked a renewal of these talks after a six-year hiatus.
[para. 4] Reeves' visit included a prominent UK delegation such as Bank of England Governor Andrew Bailey and UK Financial Conduct Authority CEO Nikhil Rathi. Discussions focused on macroeconomic issues and financial regulatory cooperation between the UK and China.
[para. 5] The UK's post-Brexit financial sector faces competition from New York, the EU, and Asia. London has implemented significant reforms to listing regulations to attract global listings, including accommodating dual or multiple exchange listings.
[para. 6] Under new regulations, major reforms were announced for listing rules, including dual-class shares and secondary listings. Chinese company SHEIN is considering a London IPO, reflecting the attractiveness of these reforms.
[para. 7] Sino-British dialogues emphasize financial connectivity, with China becoming the UK's fourth-largest trading partner. The UK wishes to sustain London's position as a global financial hub, with initiatives like RMB-denominated green bonds slated for 2025. Expanding trade and investment between the two countries is seen as mutually beneficial.
[para. 8] The Shanghai-London Stock Connect has facilitated Chinese firm listings in the UK, raising over $6.6 billion. Efforts to further this cooperation are ongoing, with discussions on launching a China-UK ETF connectivity project and wealth management initiatives.
[para. 9] London's position as a leading foreign exchange center offers RMB opportunities. China encourages British financial firms to expand their offerings in China, especially in green finance and pensions.
[para. 10][para. 11] The UK and China agreed on expanding market access and improving investment conditions, including new bond trading initiatives. The renminbi's role in London is of keen interest, where London remains a leader in RMB forex trading volume.
[para. 12] Post-Brexit reforms seek to attract Chinese firms with offshore assets to the London Stock Exchange. Recent IPO activity in London is low, but regulatory changes aim to align it with global standards.
[para. 13][para. 14][para. 15] The "China+1" strategy supports British firms in China where they find procurement favorable. The UK's recent accession to the CPTPP opens more trade opportunities, and the Labor government is keen to rejuvenate UK’s economy. Reeves’ visit to China highlights the UK's aim to maintain open trade relations amidst global economic uncertainties.
[para. 16][para. 17][para. 18] While the UK faces new political challenges, as shown by tensions with the US, it remains committed to international trade liberalization, as highlighted by its recent engagement with the Eurogroup and participation in dialogues with China, Japan, and other global players.
[para. 19][para. 20][para. 21] The UK's vibrant financial center provides an attractive venue for numerous sectors. London offers flexibility in listing procedures to better accommodate global companies, aiming to capture major international IPOs like that of SHEIN. This is part of broader efforts to reinforce London's position in the global financial system.
[para. 22][para. 23] Reeves highlighted supportive trade agreements, including Britain's largest trade marker in China, aiding trade in sectors like automotive and renewable energy. Philip Hammond emphasized Chinese investments in UK’s technology and industries.
[para. 24][para. 25] Economic relations with China could foster growth, not competition, between the two countries. The UK's strength in services and China's technological prowess offer complementary benefits. Strengthening bilateral ties is seen as pivotal for economic revitalization.
[para. 26] Reeves’ multilateral strategy reflects amid her diplomatic visits and China's pivotal role in Britain's foreign trade agenda, highlighting the importance of trade partnerships beyond traditional allies amid geopolitical complexities.
- HSBC Group
汇丰集团 - HSBC Group leaders were part of the UK delegation visiting China for the 11th UK-China Economic and Financial Dialogue in January 2025. The discussions aimed to enhance trade and investment between the two nations. Additionally, the Chinese authorities granted HSBC approval to participate in China's government bond futures trading, signaling an expansion of market access for British financial institutions in China.
- London Stock Exchange Group
伦敦证券交易所集团 - The London Stock Exchange Group has recently reformed its listing rules to offer flexibility for dual or multiple listings on exchanges in the UK, US, and Hong Kong. The reform eases IPO processes to better accommodate global companies, aiming to attract more major IPOs like the anticipated SHEIN listing. The Exchange also focuses on strengthening its international market connectivity, including partnerships with Shanghai and Shenzhen exchanges through programs like "Shanghai-London Stock Connect."
- SHEIN
SHEIN - SHEIN, a Chinese fast-fashion giant, has been working towards a London IPO following difficulties with a U.S. listing. News of its planned first-quarter 2025 IPO emerged in the second half of 2024. SHEIN's typically low-profile founder Xu Yangtian and chairman Tang Wei have met with UK officials and international investors in England. The IPO is anticipated to be one of London's largest in recent years.
- Midea
美的 - The article mentions that in a challenging IPO and refinancing environment in China, several large Chinese companies, including Midea, are seeking to go public in Hong Kong or pursue a secondary listing as "A+H." This is part of a broader trend involving Chinese companies leveraging Hong Kong's market for greater capital access while navigating domestic market conditions.
- Horizon Robotics
地平线 - The article mentions that, amid challenging domestic IPO and refinancing environments in China, several major Chinese companies, including Horizon Robotics, are pursuing IPOs in Hong Kong or "A+H" dual listings. Horizon Robotics is among the companies looking for listing opportunities abroad.
- SF Express
顺丰 - SF Express, a large Chinese enterprise, is among several mainland companies that have pursued IPOs or secondary listings in Hong Kong due to challenges with domestic IPOs and refinancing in China. This move is part of a broader trend where Chinese companies seek dual listings to potentially achieve higher valuations and mitigate the impact of domestic market fluctuations.
- CK Infrastructure Holdings
长江基建 - CK Infrastructure Holdings, chaired by Victor Li, son of Li Ka-shing, globally owns assets in energy and water utilities. Nearly half of its revenue comes from UK operations, followed by Australia, continental Europe, Hong Kong, and mainland China. CK Infrastructure was the first company to utilize the UK's new listing rules by having a secondary listing on the London Stock Exchange in late August 2024.
- CK Hutchison Holdings
长江和记实业 - CK Hutchison Holdings is mentioned in relation to its subsidiary, CK Infrastructure, which was the first company to utilize the UK's new listing rules for secondary listings. CK Infrastructure, chaired by Victor Li, son of Li Ka-Shing, is involved in global energy and water utilities, with nearly half its revenue from UK operations, followed by Australia, continental Europe, Hong Kong, and mainland China.
- BYD
比亚迪 - BYD, along with its UK partner Alexander Dennis, launched a fully electric double-decker bus in May 2024, which is gradually being integrated into London's red bus network. BYD's electric vehicles are also seen frequently in London's Westminster area, highlighting significant presence and infrastructure readiness for Chinese electric vehicles in London.
- Chery
奇瑞 - Chery is mentioned in the context of Chinese electric vehicles, with their presence being noted in London's Westminster area alongside other Chinese brands like BYD. This highlights the growing visibility and market penetration of Chinese EVs in the UK, where the infrastructure for charging is relatively sufficient.
- Maersk
马士基 - The article mentions Jens Eskelund, Chairman of the European Chamber of Commerce in China and Maersk's North Asia representative, noting that in Germany, Chinese electric cars are rare due to a lack of charging infrastructure. Maersk's representative also highlights the challenges faced by China’s electric vehicles in Northern Europe, attributing sparse usage to sparse populations and colder weather conditions.
- Tesla
特斯拉 - The article notes that Tesla might face pressure in Germany due to recent comments by Elon Musk on German politics. Musk has expressed support for Germany's far-right, anti-immigration party, the AfD, which could impact Tesla's investments and market in Germany.
- Geely
吉利 - Over the past year, Geely invested £120 million in two tranches to develop new electric vehicles for its London iconic black taxis.
- China Railway Construction Corporation
中国铁建 - In early 2020, the UK government was in talks with China's high-speed rail manufacturer, China Railway Construction Corporation, regarding the cost overruns of the HS2 railway project. Currently, more interest and demand are reportedly focused on Chinese investments in the UK's wind power sector, rather than in railways or nuclear power infrastructure.
- AstraZeneca
阿斯利康 - The article mentions that AstraZeneca, along with other major British companies like HSBC and GlaxoSmithKline, has a significant portion of its global business tied to China. These companies view China as an essential market, reflected in their substantial business investments in the region.
- GlaxoSmithKline
葛兰素史克 - The article mentions GlaxoSmithKline (GSK) as one of the major UK companies with a significant portion of their global business tied to China. The company, along with others like HSBC, Standard Chartered, and AstraZeneca, has expressed optimism about China's long-term prospects, indicating an important connection to the success in the Chinese market.
- InterContinental Hotels Group
洲际酒店集团 - InterContinental Hotels Group is mentioned as one of the large UK companies with significant business in China. The company is tied to its success in China, reflecting its importance in the global business strategy of the group.
- Prudential
保诚 - The article mentions Prudential as one of the major UK companies with a significant business presence in China. It highlights that Prudential views China as an indispensable market and that its operations in China are closely tied to its global success. Prudential is among several prominent British firms that continue to be optimistic about China's long-term prospects and reflect positive sentiment towards the improving Sino-British relations.
- Standard Chartered
渣打 - The article mentions Standard Chartered as one of the major UK companies with a significant presence in China. It highlights that British businesses, including Standard Chartered, are deeply integrated with China's success and view the Chinese market as crucial for their global operations. The article suggests that despite challenges, UK companies see long-term value in maintaining their business ties with China.
- By 2024：
- The British pound, along with the Chinese renminbi, depreciated the least against the U.S. dollar among major currencies.
- July 2024：
- The Labour Party won the general election, and Rachel Reeves became the British Chancellor of the Exchequer.
- July 2024：
- The Starmer government was formed in the UK, leading to improved Sino-British relations.
- Second half of 2024：
- Significant listing rule reforms take effect in the UK.
- Late August 2024：
- CK Infrastructure Holdings Ltd. conducted a secondary listing on the London Stock Exchange.
- November 2024：
- Chinese President Xi Jinping and Starmer held the first face-to-face meeting during the G20 Summit in Brazil.
- January 11, 2025：
- Reeves met Chinese Vice Premier He Lifeng and presided over the 11th China-UK Economic and Financial Dialogue.
- January 11-12, 2025：
- Rachel Reeves made an official visit to China.
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