Shanghai-London Stock Exchange Cross-Trading System Relaunched... Preparing for Second Company

[Asia Economy Beijing=Special Correspondent Park Sun-mi] The Shanghai-London cross-listing system 'Hurun Tong,' which had been suspended for a year due to conflicts between China and the UK over the Hong Kong protests, is set to be reactivated.

On the 4th, Bloomberg reported that China Pacific Insurance, the fourth-largest insurer in China by market share, recently received approval from Chinese securities authorities to issue Global Depositary Receipts (GDR) and list on the London Stock Exchange. The newspaper stated that if the process proceeds smoothly, China Pacific Insurance could be listed and traded on the London Stock Exchange within this month.

China Pacific Insurance will become the second Chinese company to be listed on the London Stock Exchange through Hurun Tong. Hurun Tong, symbolizing the expansion of cooperation between the Chinese and British capital markets, had no additional listed companies since Huatai Securities issued GDRs on the London Stock Exchange a year ago, raising $1.69 billion. Pacific Insurance originally aimed to proceed with the London listing in the first quarter of this year, but the plan was reportedly postponed once.

The market views that the deterioration of relations between China and the UK, triggered by the Hong Kong protests that intensified in the second half of last year, has prevented Hurun Tong from operating normally until now. Earlier this year, China SDIC Power Holdings planned to use the Hurun Tong system to list on the London Stock Exchange but postponed the plan to the end of the year citing 'market conditions.' In this context, Western media reported that Chinese authorities unofficially instructed companies to halt London listing procedures.

The UK has criticized the Chinese central government's hardline stance on the Hong Kong protests, while China has claimed that Western powers such as the US and the UK are instigating the protests. However, even if Hurun Tong succeeds in reactivation this time, diplomatic discord remains between China and the UK due to the Hong Kong National Security Law, which China is pushing for legislation, leaving ongoing concerns.

The UK has reiterated that it will accept Hong Kong residents by revising immigration laws if China enforces the Hong Kong National Security Law. On the same day, UK Prime Minister Boris Johnson wrote in The Times that "if the Hong Kong National Security Law is implemented, Hong Kong's freedoms and autonomy of the system will be severely undermined," indicating his intention to amend immigration laws. On the other hand, British financial institutions such as HSBC and Standard Chartered (SC), which had not previously voiced political opinions, expressed support for the Hong Kong National Security Law under pressure from China.