Chinese rounding on Square Mile

Roger Gifford has been a regular visitor to China since 1995. [Photo / China Daily]

City of London mayor looks forward to opportunities in new Shanghai FTZ

China's rapidly maturing financial services industry has brought the country increasingly closer to the City of London, the Square Mile's Lord Mayor Roger Gifford says.

Since Gifford took up his one-year appointment in November, China Construction Bank has issued a dim sum bond (denominated in Chinese currency) in London, a yuan swap line has been established between the central banks of Britain and China, China's Ping An Insurance has bought the freehold to Lloyd's of London's office. The list of Chinese investment continues.

Such a picture is in sharp contrast to his memories of China in 1995 when he visited the country for the first time.

"It was very different back then," the 58-year-old lord mayor recalls. "When I first visited, the whole of Pudong (the central business district of Shanghai) was flat, but construction was already beginning."

China went on changing during Gifford's subsequent trips, in 1998, 2002, 2006, 2010 and again this year.

"Of course, China is now much more active, much more open and much more liberal," he says. "China grew steadily in the 1980s. Then in the 1990s you had this feeling of 'Wow, there is a huge power to grow'."

With each change, China's financial market also seems to be affording additional opportunities to companies in the City of London, Gifford says.

His visit to China this month has been fruitful. He was particularly excited to talk to Shanghai's local government about the city's newly launched free trade zone and what it means to the City of London.

Officially opened on Sept 29, the China (Shanghai) Pilot Free Trade zone is an initiative by the Chinese government to test economic and financial reform. It will be replicated across China if successful.

Spanning an area of nearly 28 square kilometers, the zone will help to upgrade financial services, promote trade, improve governance and encourage foreign investment in 18 sectors in the country's regulated service industry, the Chinese government says.

There are also plans to experiment with the convertibility of China's controlled currency, the yuan, and let market forces rather than regulators set interest rates.

Gifford says he is particularly interested in the increased liberalization of financial services in the zone, although it is too early to tell how it will help London's businesses because details of regulations have yet to be announced.

"If it allows more services, typical services which London produces, to be brought into China via this site, then that's interesting. So we bring the services - might be banking, might be law, might be accounting - and see what can be done," he says.