China has temporarily blocked planned cross-border listings between the Shanghai and London stock exchanges because of political tensions with Britain, five sources told Reuters.
Suspending the Shanghai-London Stock Connect scheme casts a shadow over the future of a project meant to build ties between Britain and China, help Chinese firms expand their investor base and give mainland investors access to UK-listed companies.
The sources, who include public officials and people working on potential Shanghai-London deals, all said that politics was behind the suspension.
Two of them highlighted Britain’s stance over the Hong Kong protests and one pointed to remarks over the detention of a now-former staff member at its consulate in Hong Kong, Reuters adds.
All five sources have been involved in talks with Chinese officials and spoke to Reuters on condition of anonymity because they are not authorized to speak about the matter publicly.
British companies and banks involved in the scheme are watching closely how recently-elected Prime Minister Boris Johnson approaches relations with Beijing and what stance he takes on Hong Kong, which has been roiled by protests.
China blames the Hong Kong unrest, heavily supported by an anti-government movement seeking to curb controls by Beijing, on interference by foreign governments including the United States and Britain.
China’s Ministry of Foreign Affairs said in a faxed statement that it is not aware of the specifics, but added that it “hopes the UK can provide a fair and unbiased business environment for Chinese companies that invest in the UK and create the appropriate conditions for both countries to carry out practical cooperation smoothly in various fields.”
Stock Connect, which began operating last year, was devised as a way of improving Britain’s relationship with the world’s second biggest economy and was seen as a major step by China to open up its capital markets as well as linking them globally.
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