City of London woos China Investment Corp

By Mao Lijun and Li Weitao (China Daily)
Updated: 2007-10-26 11:45

The City of London, a leading international financial center, is lobbying China's new sovereign wealth fund to set up a branch in London.

Alderman John Stuttard, lord mayor of the City of London, yesterday met Lou Jiwei, chairman of China Investment Corp (CIC), to discuss the proposal.

"I hope CIC will choose to draw on the UK's expertise in asset management and use the investment channel for its sovereign wealth fund," he said before the meeting.

Stuttard's enthusiasm is a departure from other Western countries' calls to control the activities of sovereign wealth funds amid fears they could try to seek controlling stakes in strategic industries.

Lou, who oversees the $200 billion fund to get a better return on China's US$1.43 trillion of foreign currency reserves, last week said CIC will not seek a controlling stake in its investments and promised transparency in operating the fund.

Before CIC was formally launched on September 29, it plowed US$3 billion into US investment firm Blackstone.

It has yet to open an overseas office and has not disclosed any further investment.

Stuttard said the UK welcomes investment from China. By the end of last year, 270 Chinese companies had invested in the UK and the number has now grown to 340.

The City of London, or the Square Mile, is the UK's financial center. Bank of China already has a branch there.

The City of London has been under growing pressure to build ties with Asia.

A report by SAMI Consulting and Oxford Analytica released last October said the financial district must work hard to develop better business relations with China and India or risk losing out to competing cities and countries.

Stuttard, who will meet with top officials from the China Securities Regulatory Commission today, is also expected to lobby the Chinese securities watchdog to allow more Chinese firms to float shares in the UK.

By the end of last year, 27 Chinese companies were listed in the UK. The number soared to 81 by August, including six mainland companies and 14 from Hong Kong trading on the main board, and 61 on the AIM.

"I'm confident that China will continue to present tremendous opportunities for the business of the City of London, take part in private equity and venture capital, mergers and acquisitions and listings on the London Stock Exchange," Stuttard said.

The London Stock Exchange is planning to open a Beijing office, which could play a crucial role in attracting mainland companies to float in the UK.

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