Updated 11:29 AM EDT, Tue, Jun 16, 2020

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British Chancellor George Osborne Welcomes Greater Financial Partnership With China


(Photo : Reuters/Lintao Zhang/Pool) UK Chancellor George Osborne is in China to promote greater economic ties between his country and China.

British Chancellor George Osborne is in China to promote greater financial ties for both countries. Despite the Chinese economic slowdown, he believes that interconnecting the British and Chinese stock markets would prove beneficial to the former. 

Osborne would like his country be the dominant European offshore trader for the Chinese yuan. He is unfazed about the possibility that Britain could be affected by unpredictability in China's currency and stock market in the future.

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An interlinked stock market could also open up British and other European stocks to Chinese investors. However, several challenges would have to be overcome, such conflicting stock rules and the differences in their hours of operation.

The Chinese stock market crash and the heavy handedness of Chinese authorities in dealing with the crash has made foreign investors worried that Beijing is not yet willing to let free market run its economy.

The two countries have agreed to strengthened the currency swap with the Chinese central bank promising to issue short term loans denominated in yuan to British firms. If such financial arrangement pushes through, it will be the first time that China will issue yuan debt instruments to foreigners.

The British desire for greater economic partnership with Beijing has made its government join the newly formed Chinese-led global lending bank, despite objections from the American and Japanese government.

Many have criticized British Prime Minister David Cameron of appeasing China by ignoring or not pressing too much over its human rights records. In 2012, Cameron had a talk with the Dalai Lama, Tibet's spiritual leader in exile, and this prompted China to halt top government meetings with Britain. It took more than a year before normal diplomatic relations were reestablished. In late 2103, the British Prime Minister visited China and promised the Chinese communist Party of his commitment to establish permanent friendly relations, according to The Guardian

President Xi Jinping is set to visit Britain in October of this year.

The British chancellor, meanwhile, has offered to fund a British Museum tour in China. He hopes that such cultural exchange will also promote goodwill between the British and Chinese people, according to the BBC.

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