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March 19, 2019

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London’s long-term tie-in with Shanghai

This week sees my visit to Shanghai as Lord Mayor of London. In this role, I lead the City of London, home to the UK’s financial center, better known as the Square Mile. More broadly, I am a principal ambassador for the UK’s financial and professional services industry.

As fellow financial hubs, the City of London and Shanghai are built on business and the seamless cross-border flow of innovation, technology and ideas. To facilitate this, both of our cities operate through cooperation and exchange with our international partners.

Little surprise, therefore, that London and Shanghai have been working together for more than two decades.

Back in 1996, we signed our first cooperation agreement (a General Protocol), which became a memorandum of understanding in 2007. This was re-signed last year by my predecessor and the Mayor of Shanghai, Ying Yong, whom I am delighted to be meeting on my visit to the city this week.

We have much to gain from continuing to work together in so many areas, including capital markets, asset management, green finance, the Belt and Road Initiative, and fintech.

The fintech industry now contributes £7 billion (US$7.9 billion) annually to the UK economy, employing over 76,500 people across 1,600 companies, many based in London. Here in China the outlook is equally as buoyant.

Over US$15 billion was invested in companies in the country last year, second only to that in the UK. In the same period, more than 580 million people made at least one mobile payment in China, up more than 10 percent year on year. Much of this growth is here in Shanghai, thanks to the city’s high concentration of global financial firms alongside leading research institutions.

My mayoral campaign, Shaping Tomorrow’s City Today, aims to promote innovation and technology, champion digital skills and address digital and social inclusion across the UK and around the world. We need to ensure that our nations are ready for the challenges and opportunities presented by the Digital Age and by a global outlook that is fast turning towards Asia.

In our changing world, it has never been more important to strengthen ties between East and West, and between cities like London and Shanghai.

We’re already making great strides in this area. The much-anticipated London Shanghai Stock connect will soon allow investors from China and the UK to buy stocks from each other’s markets, accelerating the opening-up of China’s financial sector, and increasing investor awareness of the RMB currency, for which London is already the largest offshore trading hub outside of Asia.

Chinese businesses, many from Shanghai, have for many years played an important role in London. Nearly 40 financial institutions from China already call London home, while many of London’s financial firms — large and small — have operations in Shanghai.

Elsewhere, London, as a leading international financial center, is the natural Western hub of the Belt and Road, able to work with Shanghai to support the initiative in many areas, not least infrastructure financing, consultancy, green finance, legal services and foreign exchange.

We recognize that Brexit is causing short-term uncertainty, but we are focussed on the long term. We and our industry partners know that London’s strengths as an international financial center will remain, as will our policy of welcoming greater ties with our Chinese partners like Shanghai.

Peter Estlin was elected an Alderman of the City of London in 2013 and elected Sheriff for the City of London for the year 2016/17. His civic responsibilities include being a member of the City of London Corporation’s Education Board, Finance and Establishment Committees.


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