The £342m of UK investments that will help fund Chinese debt

| 792 | :   Twitter |   LinkedIn

Hundreds of millions of pounds of British investments are set to be ploughed automatically into Chinese government debt.

The £342m of UK investments that will help fund Chinese debt

Calculations for the MoS reveal that £342million held in UK funds is set to flow into the Communist country’s national coffers after Chinese government bonds were upgraded by the London Stock Exchange (LSE).

The LSE has given the green light for the Chinese Communist Party to list its bonds on the World Government Bond index. China’s sovereign debt is currently in the emerging market category.

Promotion to the global index gives China access to much larger pools of capital

UK funds have already invested £3billion in Chinese sovereign bonds, according to analysis by stockbroker AJ Bell. Promotion to the global index gives China access to much larger pools of capital.

China is expected to gain access to more than $140billion (£110billion) of investments when its bonds appear on the index from 2021. It will replace Britain as the sixth-largest member of the index.

Many UK funds – including some managed by Standard Life Aberdeen, Barings and Legg Mason – invest in the World Government Bond index and would become owners of Chinese bonds by default unless they actively avoid them.

The LSE group has negotiated with Chinese officials for a year to push for the rule changes needed for the listing. The exchange will now monitor Chinese markets for six months to ensure traders stick to the new regulations before starting to list the bonds.

Chinese sovereign debt boasts yields of up to 3.5 per cent – compared with near-zero, zero or negative yields on debt from most developed countries.

China’s promotion comes as UK banking giants face intense pressure from the Communist regime.

HSBC and Standard Chartered have been forced to pledge allegiance to Beijing even as the UK admonishes China for its crackdown in Hong Kong.

Neil O’Brien, Conservative MP for Harborough, said: ‘We allow China to access large amounts of capital – including the investments of British savers – but they have an extensive list of things we can’t invest in within China. The Chinese are trying to have it both ways, where they have access to Western capital, but don’t really run a free-market economy.’

| 5692 | :   Twitter |   LinkedIn

Source : China | Photocredit : Google

Follow China Today

Subscribe Now

Enter your email address:

Topic Keywords # #

Related News

China’s box office starts the Year of the Ox breaking daily world record post COVID-19

China’s box office on Friday, the first day of the Chinese New Year, set a new record for the daily box office of China’s film market and broke…

‘Shock Wave 2’ tops China’s box office

A blockbuster making a splash in China’s lackluster market, the crime thriller Shock Wave 2, starring Andy Lau, has overtaken Eddie Peng’s The Rescue to top the country’s box office charts since…

Initial box office remains tepid while critics say woman warrior remains a role model

Song of Mulan, the ballad written 1,500 years ago by an anonymous Chinese poet, has inspired countless plays, novels and poems over the centuries. It is part of…

China Today Wiki

Popular News by Topics