Business / Economy

What next for Chinese companies after the UK exit?

By Li Xiang (China Daily) Updated: 2016-06-27 07:18

What next for Chinese companies after the UK exit?

Photo taken on Jan 29, 2016 shows the UK and EU flags outside the European Commission headquarters in Brussels, Belgium. [Photo/Xinhua]

However, some experts believe Brexit will only have a limited effect on China's financial markets and will even likely boost the yuan's status as a global currency.

"The decision may actually accelerate the competition between other European cities for yuan businesses, and, as a result, Britain may have to provide Chinese institutions with better terms," Xiang Songzuo, deputy director of the International Monetary Institute at Renmin University, told Xinhua News Agency.

Lian Ping, chief economist of Bank of Communications, said the status of London as an offshore yuan trading center will be affected, although to what extent remains to be seen. So, this could open up opportunities for yuan business in Frankfurt, Luxembourg or Zurich.

Deng Haiqing, chief economist with JZ Securities Co, a brokerage, said Brexit could be a favorable factor that offers major strategic opportunities for China.

"After exiting the EU, the UK will have to find new markets. Thus, it needs to strengthen the cooperation with countries like China," Deng said.

"It also means the UK, which has broken away from the inefficient decision-making mechanism of the EU, can work more independently and more effectively. And the EU might be forced to improve efficiency as well," he said.

Zhang Xiaomin contributed to the story.

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