Gordon Innes Photo: Courtesy of London & Partners
Despite some uncertainties after the UK voted to leave the EU, London's status as world-class financial hub is expected to remain unchanged, according to a London expert.
Gordon Innes, CEO of -London & Partners, told the Global Times Monday that the London financial hub is the result of centuries of work and the complex, interrelated clusters of business and skills concentrated in London is "quite hard to replicate."
Innes does not see why companies will leave, given the city's strength.
London & Partners is a promotional company for London.
Innes said that it is difficult for other financial centers on the European continent to replicate in the short term what London has created - the complex mixture of banking, insurance, trading and all the professional services that go along with that.
Since the referendum, HSBC and Barclays have committed to keeping their headquarters in London.
However, Innes said it would be foolish to pretend that there are not some uncertainties as the country enters a period of political negotiations with the EU over its exit.
"Uncertainties around regulatory passporting rules would be a key one in the financial services area. The UK wants to maintain a very close relationship with the EU," Innes noted.
"London-based financial services companies serve a lot of European businesses, and they need to have access, or they will suffer very significantly," said he.
There is a lot of media speculation about the outcome of the negotiations, but it's too soon to tell, he said.
Innes said that continued access to talent and markets, and the ability to continue to trade from London as a base are things the new UK government will seek in the negotiations.
The new UK leadership has indicated that it is critical in negotiations with the EU and European nation states that the UK maintain passporting rules and prioritize access to the internal market, he noted.
London & Partners has helped dozens of Chinese companies to invest and move to London in the past few years.
Chinese companies from a wide range of sectors including real estate, science, banking, creative services and high-tech industry sectors have established a presence in London, mainly to access the UK market, noted Innes.
Banks based in China, even smaller banks, have also set up branches in London off the back of bilateral trading relationships, Innes said. London is now the second-largest offshore yuan trading center after Hong Kong.
Many come to London to access a world-class science base, as the city has more top international universities and research labs than any other city in Europe, the CEO said.
At the end of June, Huawei Technologies Co confirmed to the UK government that its planned 1.3 billion pound ($1.73 billion) investment in the UK will go ahead as planned.
"While we may see a pause for a period of time in new investment [to London] until greater clarity [is provided], those investments that have been made here were made for sound reasons and were about the fundamental strength of the London economy," Innes said.
More Chinese companies in the creative space, such as fashion, retail and publishing, are also looking to London for collaboration because of the creative cluster in the city.
"The broad range of companies from China coming into the UK reflects the transition of the Chinese economy toward a consumer-based, service-based economy," Innes said.
"In this regard, obviously the UK is the world's leading services economy. Hence the opportunity to collaborate for investment has become very strong," he noted.
After the referendum, London & Partners found investors had no desire to move their operations to other locations, at least in the short term.
"Companies that have already invested and come here have indicated that London is the best place for them to internationalize and expand," noted Innes. "At the moment, nothing has changed, it is business as usual."
"But they are adopting a wait-and-see stance over the outcome of long-term negotiations," he said.
