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China pulls plug on Shanghai and London cross-border listings

By Charlotte Ricca

Stock exchange link-up suspended over political tensions on Hong Kong

China has hit the brakes on planned cross-border listings between the Shanghai and London stock exchanges, due to political differences.

Five sources, including public officials and people working on Shanghai-London deals, told Reuters that the UK government’s stance over the Hong Kong protests was to blame. They also cited remarks over the detention of a former employee of the UK's Hong Kong consulate.

The London-Shanghai Stock Connect was first announced in 2015 by David Cameron, then the UK Prime Minister, and Chinese president Xi Jinping. It allows companies listed on one exchange to apply to sell shares on the other.

It was hoped that the agreement would strengthen Sino-British relations, but no UK-listed company has used it since it was officially started in June.

Huatai Securities became the first – and only – Chinese group to use it in the month of its launch, when it raised $1.54bn (£1.17bn, € 1.38bn) selling depository receipts on the London Stock Exchange.

Both the LSE and SSE did not respond to Reuters’ requests for comment.

However, China’s Ministry of Foreign Affairs sent a faxed statement explaining it is not aware of the details of the suspension, but said: "[We] hope 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."

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