City of London turns to Asia as Brexit looms

The Lord Mayor of the City of London, Peter Estlin, paid an official visit to Hong Kong this week to reinforce the United Kingdom’s links with the territory. He is also an ambassador of the UK’s financial and professional services.

Hong Kong is the third stop in his 12-day visit to Asia, and no visit by UK officials and business leaders at this juncture would be complete without discussing Brexit. Estlin has sought to provide reassurance about London’s long-term strengths to Asian partners in advance of the UK’s departure from the European Union.

“In regard to Brexit – yes, we have experienced a period of uncertainty. However, the UK will come through this, just as we have come through periods of uncertainty throughout history. What does need to come through, and I hope it will do soon, is the sheer scale of innovation in the UK,” said Estlin, who voted to remain in the EU in the 2016 referendum.

He said the City of London had been working with the UK government and industry partners to create the certainty that business would need. In the longer term, London’s strengths would help it transcend what he called “short-term” impact of Brexit and remain an international financial center.

The UK is a leading exporter of financial services, booking a trade surplus of US$92.9 billion in 2018. The City of London, the jewel in the crown, has more foreign banks than any other financial center. The UK’s financial and professional services as a whole employ 2.2 million people, of whom 1.4 million are based outside London, according to the City of London Corporation, which is the governing body of the Square Mile.

The looming hard Brexit – the UK being booted out of the EU if a deal cannot be agreed upon before the March deadline – has made it incumbent upon the City of London to cement financial and business ties with its fellow international financial centers across Asia.

Before departing Hong Kong, Estlin hosted a press conference briefing the local and international media about the City of London’s core messages on the UK’s departure from the EU and its partnership approach to developing opportunities between Hong Kong and mainland China with the wider UK economy.

He stressed that London, and more broadly the UK, were home to a leading international financial center and remained the global partners of choice for Hong Kong and mainland China for financial and professional services.

He said London, Hong Kong and mainland China had much to gain from boosting cooperation, particularly in industries of the future like financial technology, artificial intelligence and cyber innovation, and collaborating in the Belt and Road infrastructure financing and RMB offshore trading.

His visit also came in the wake of the launch of a new UK government pilot program supporting British companies looking to expand into the Hong Kong fintech market.

Over the last five years, there has been 15% growth in UK companies opening offices in Hong Kong, and the City of London is now home to more than 50 Hong Kong financial firms that employ more than 6,000 people.

“Significant long-term opportunities for the UK are to be found in Asia. The world is pivoting East, and we cannot afford to be left behind,” Estlin said.

Estlin lived in Hong Kong between 1996 and 1999, during the handover and the nascent years of the city as a special administrative region under Beijing’s suzerainty. He became the 691st Lord Mayor of the City of London and assumed his tenure in November 2018.