According to five sources, China has temporarily blocked the planned cross-border listings between
the London and Shanghai stock exchanges due to political tensions with Britain.
The suspension of the Shanghai-London Stock Connect scheme has cast a shadow over the future of a project which was designed to improve ties between China and Britain and help Chinese firms expand their investor base while giving mainland investors access to UK-listed companies.
All sources, including those who are public figures and people working on the potential Shanghai-London deals, said politics was behind the suspension.
Two of the sources, highlighted Britain’s stance over the protests at Hong Kong while another pointed to remarks over the detention of a now former staff member at its consulate in Hong Kong.
All of the five sources have been involved in talks with Chinese officials and spoke on the condition of anonymity since they are not authorized to speak publicly about the matter.
British banks and companies are closely watching Prime Minister Boris Johnson’s approach to China and his stance on China’s mishandling of protests in Hong Kong.
China continues to blame the Hong Kong pro-democracy protests, on foreign governments including Britain and the United States.
Neither, the China Securities Regulatory Commission nor the Shanghai Stock Exchange responded to requests for comments.
London Stock Exchange’s spokesperson and the UK’s finance ministry spokeswoman declined.
In a faxed statement, China’s Ministry of Foreign Affairs stated, it is not aware of the specifics, but “hopes [that] 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”.