City of London welcomes China's contribution

China can significantly contribute to global economic growth by further advocating free trade and opening up its domestic market to foreign exports and investment, according to Mark Boleat, policy chairman of the City of London Corporation.

Speaking to China Daily ahead of this year's World Economic Forum in Davos, which President Xi Jinping will attend, Boleat said the international expansion of Chinese companies was significant for global growth.

It would not only create jobs, but also lower the costs for consumers through increased competition, he said.

"If the price of a basket is two percent lower, then that will make a big difference to people on low to medium income levels," Boleat said. "When Chinese companies are selling products cheaper, this is creating income somewhere else in the economy which can provide goods and services and therefore increase employment."

Boleat has the senior political role in the Corporation, which is the local authority for Britain's City financial center.

His comments come when China is ramping up efforts to promote free trade, while the US appears to be moving toward more protectionism, to judge from president-elect Donald Trump's campaign messages.

Boleat said 2017 is looking fairly good in terms of international growth, with international trade, consumption and new technology set to be key drivers of global growth in the current economic climate, with China contributing significantly on all fronts.

"As China is either the biggest or the second-biggest economy and its growth has passed nearly every other economy, it is going to make a big contribution," Boleat said.

He said China's big presence at Davos is "another indication of China becoming more influential in the global economy, taking parts in global events". He added the Chinese presence also allows opinion leaders from other countries to deliver their views and concerns to Chinese leaders.

"It's not just China giving its views. Davos is about debate and listening, and if the Chinese delegation is attending to do that, I think that could only be a good thing," he said.

Boleat said Chinese measures to open up its financial markets, through exchange rate reform, renminbi internationalization and larger quotas for foreign financial investment, are already contributing to global growth, although the further removal of restrictions on financial sectors are desirable.

The internationalization of Chinese companies is also making a big contribution to the global economy, with Boleat's team in the City of London witnessing big growth in the presence of Chinese financial firms in recent years.

So far five Chinese banks have established branches in the City of London, the London Stock Exchange has listed 89 renminbi bonds raising $5.83 billion in total, and a feasibility study to connect the stock exchanges of London and Shanghai is under way.

Boleat stressed London's attractiveness to Chinese financial institutions, noting that Brexit-related uncertainties so far had little impact on their investment plans, as Chinese banks rarely use their London presence to conduct European market activities and will therefore not be affected by Brexit-related regulatory changes.

Meanwhile the two countries have a potential to strengthen manufacturing collaboration, as the UK champions advanced engineering and China is also moving up the value chain in manufacturing, he said.