China suspends trading link between Shanghai and London

China has suspended a trading connection between stock exchanges in Shanghai and London, raising questions about the future of the much-hyped initiative less than a year after its launch.To get more Shanghai business news, you can visit shine news official website.

The temporary halt to the Shanghai-London Stock Connect comes amid rising political tensions linked to the UK’s response to anti-government protests in Hong Kong, according to a Reuters report.

A spokeswoman for the London Stock Exchange declined to comment. The Shanghai Stock Exchange did not immediately respond to a request for comment.

Stock Connect was designed to link China’s domestic capital markets with the international investment community via a tie-up between the SSE and the LSE.

The initiative launched to much acclaim last June, when Huatai Securities raised $1.5bn by selling instruments known as global depository receipts and listing them in London. Stock Connect was hailed as a sign of China’s willingness to open its financial market to international investors; Huatai remains the only issuer to have made use of the link.

Reuters reports that the decision to stop Stock Connect was based on political tensions.

Hong Kong, the former British colony that has been under Chinese control since 1997, has had months of protests, often violent, over the influence wielded by Beijing. In November, China’s ambassador to the UK, Liu Xiaoming, accused Britain of “interference” in Hong Kong by covertly backing the protests, The Telegraphreported at the time.

These tensions could raise difficult questions for the UK as it prepares to adopt a more global approach to trade and business following Brexit. The relationship between China and the UK is crucial for the City of London, which has stepped up the amount of business it does with Asia in recent years.

The City has emerged as a major hub for offshore renminbi trading. There are more than 30 Chinese financial institutions in the Square Mile alone, according to the City of London Corporation and the People’s Bank of China.