Plans for London-Shanghai Stock Connect have been greenlighted by the British Government as the country looks to expand global trade ties in a post-Brexit world.
The creation of a direct trading link would open up a major trade route to Europe's capital markets for companies operating in the world's fastest growing economy.
Following a year-long feasibility study, UK Chancellor Philip Hammond says both exchanges will now work together to research and prepare implementation arrangements.
Announced as part of the 8th annual UK-China Economic and Financial Dialogue (EFD) at Lancaster House in London, other aspects of co-operation agreed between China and London focus on eight key areas: capital markets; asset management; insurance and pensions; banking; Green Finance; fintech; China’s Belt and Road Initiative; and financial inclusion.
Chief among these include the establishment of a UK-China 'FinTech Bridge', aimed at strengthening regulatory cooperation and boosting reciprocal market access for both UK and Chinese fintech startups.
Andrew Bailey, chief executive of the FCA says the bridge "will allow us to share information about financial services innovations in our respective markets, including emerging trends and regulatory issues.
"We hope that by strengthening links between the regulators, barriers to entry will be reduced and innovation encouraged in both countries’ financial services sectors."
Welcoming the initiative, UK fintech ambassador Eilleen Burbidge notes the staggering growth of China's fintech sector, creating eight of the world's 27 fintech unicorns and last year attracting over £2 billion worth of investment.
"Naturally, some of the UK’s most ambitious fintech companies want to explore opportunities and set up operations in China, while at the same time Chinese fintech giants and investors are increasingly looking to meet the demand for financial services in the UK," she says. "This new fintech bridge will streamline the dialogue between our two fintech sectors, making it easier for fintech to move across borders."