John Edwards, Britain’s trade commissioner to China, said London is trying to make mainland Chinese businesses’ British listings quicker and cheaper to compete with Zurich for European secondary share sales.
Due to Sino-U.S. tensions, some Chinese companies have been recently listed in Europe.
The London Stock Exchange and British authorities are using Europe’s deepest capital market to establish a strong pipeline of Chinese enterprises.
“We prioritize it,” Edwards told Reuters.
In recent years, Chinese corporations’ U.S. listings have slowed due to Beijing’s regulatory crackdown. New guidelines and a separate auditing dispute between the authorities have been addressed. Yet, broad bilateral tensions between the two major economies persist.
Edwards called London “an obvious alternative” for many Chinese enterprises “given the problems around the U.S.-China relationship.”
“Raising that company’s capital in Europe and the U.K. is smarter than in the U.S.,” he remarked. China-listed businesses can sell GDRs on the London exchange under the 2019 Shanghai-London Connect. But, the eight-month-old China-Switzerland Link attracts more Chinese enterprises due to its simpler approach.
Edwards said the London Stock Exchange is “looking at how they might fix some of the concerns.”
“They ask advisers and prospective targets: Can you simplify any of the procedures to save time or money? You outcompete Switzerland.”
An unnamed British source told Reuters that the London Stock Exchange Group (LSEG) (LSEG.L) might restructure later this year.
In recent weeks, LSEG has been pushing Britain’s capital markets to Chinese enterprises in China.
Refinitiv, previously Thomson Reuters, is owned by LSEG. It pays Thomson Reuters for Refinitiv terminal news. Thomson Reuters partly own LSEG.
