What next for Chinese companies after the UK exit?
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E-mail China Daily, June 27, 2016
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A working staff counts the Chinese currency at a credit union in Tancheng County of Linyi City, east China's Shandong Province. [Photo/Xinhua] |
Analysts are divided on the potential impact of Brexit on the China-UK relations in financial services.
The two countries have agreed to establish a trading link between the Shanghai and London stock exchanges. Before the vote, Chinese policymakers have been keen to make London a major offshore trading hub for the Chinese currency.
Some said Brexit could well jeopardize the internationalization of the renminbi and trigger capital outflows, exerting depreciation pressure on the Chinese currency and complicating the country's monetary policy.
China's stock market will also suffer greater volatility as Brexit would reduce the risk appetite of investors who would shift their money to safer assets such as gold and the US dollar.
The People's Bank of China, the central bank, has already vowed to keep its domestic liquidity reasonable and ample to keep the yuan stable. It has also said it will maintain a prudent monetary policy.
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