(Yicai) April 22 -- There is still enormous potential for the connectivity of the Chinese and UK capital markets, according to London Stock Exchange Group's president for China.

LSEG has clearly felt that interactions between the Chinese and UK financial markets are becoming increasingly frequent, so it hopes that they will continue to grow closer, Chen Fang, who is also the company’s managing director for North Asia Pacific, told Yicai in an exclusive interview.

One of the first achievements of the China-UK capital market connectivity was the Shanghai-London Stock Connect, which was followed by the Shenzhen-London Stock Connect. Cooperation has evolved from cross-border global depository receipt issuance in the equity market to joint efforts across multiple financial products, such as indexes, bonds, and exchange-traded funds.

Twenty-three Chinese firms are now listed on the London Stock Exchange, but Chen expected more of them to raise capital in London. Likewise, she believes that more UK and international companies will tap into China’s capital markets in the future.

We continue to see strong interest among issuers in the Asia-Pacific region to raise capital in London, Chen said. The LSE is highly open and has kept refining rules, including accounting standards, in recent years, creating a more attractive listing pathway and a more convenient, business-friendly environment to attract global financing entities, she noted.

London’s key advantage lies in its central time zone, which effectively links Asian and US trading sessions, pools global capital from Europe, Asia, Africa, the United States, and beyond, and hosts a highly international and diversified investor base, Chen explained.

Connectivity mechanisms, such as the Shanghai- and Shenzhen-London Stock Connect programs, have laid a solid foundation for China-UK capital market cooperation and helped showcase high-quality Chinese enterprises to global investors, Chen pointed out.

She expressed confidence that companies that can clearly articulate their development stories and deliver sustained strong performance will be able to take root in London for the long term.

As a financial market infrastructure provider, LSEG offers financial data, analytics, news, and index products to over 40,000 institutions and companies across more than 170 countries and regions, covering every stage of the trading cycle. It has operational entities and local legal entities in China, with subsidiaries in Beijing, Shanghai, Shenzhen, and Hong Kong, employing more than 1,200 locals.

Chinese Assets Are a Must-Have

More and more global investors are no longer pondering whether to invest in China; they are actually considering how to allocate Chinese assets in a more refined and long-term manner, Chen told Yicai. China’s capital market has become a key pillar and an important safe haven in global asset allocation, with its development trends and opportunities over the next three to five years drawing intense attention.

Global investors now hold a more rational and structured attitude toward Chinese assets, according to Chen. In the short term, they are placing greater emphasis on risk management and liquidity in asset allocation. But in the medium to long term, the resilience of China’s economy, the potential of industrial upgrading, and the continuous opening-up of its capital market still make Chinese assets irreplaceable in global portfolios.

Looking ahead, the Chinese market will likely continue to integrate into the global system in a more orderly and controllable manner, whether in cross-border investment mechanisms, index inclusion, or infrastructure and regulatory alignment, Chen predicted. The must-have status of Chinese assets in global allocation will become more prominent, though in a more refined and structured way.

As pension funds, insurance assets, public funds, and long-term foreign capital play a bigger role, the investment logic of China’s capital market will focus more on fundamentals, long-term returns, and risk management, Chen said. This will not only help stabilize market volatility but also keep raising demand for high-quality data, professional analysis, and risk management capabilities.

Chen believes that the issuance, pricing, and exit mechanisms of China’s capital market will become more market-oriented, with a more effective survival-of-the-fittest regime, and will further shift from focusing on access approval to emphasizing continuous information disclosure and corporate governance, which will provide a more predictable investment environment for long-term capital.

A major role of LSEG is to help global investors better understand the Chinese market, manage related risks, and improve allocation efficiency in compliance with regulations, Chen told Yicai.

LSEG enhances the comparability and interpretability of Chinese assets from a global perspective through high-quality market data, indexes, and analytical tools, enabling foreign investors to identify opportunities in China and supporting long-term capital in making more rational and sustainable investment decisions.

On deepening the medium-to-long-term cooperative relationship between the Chinese and UK capital markets, Chen said she hopes that the two sides will continue to strengthen collaboration in market infrastructure and connectivity, supporting the cross-border allocation of long-term capital through more efficient and robust mechanisms.

She also expects China and the UK to enhance regulatory alignment and professional exchanges in data, indexes, risk management, and green finance to improve market transparency and comparability. Moreover, continued dialogue between regulators and market participants can provide a stable long-term policy and institutional foundation for bilateral cooperation amid a complex international environment.

Editors: Tang Shihua, Futura Costaglione