HKEX's proposal would mean a Chinese firm owning the main equity markets of Britain and Italy, and key clearing infrastructure for European debt markets
have been eventful for bosses in Hong Kong, including Charles Li, the head of the island’s stock exchange. Last month, just days after a huge deal in his industry was announced—an agreement by the London Stock Exchange Group to buy Refinitiv, a data provider, for $27bn—the Chinese People’s Liberation Army released a video of troops performing anti-riot drills, a scenario that Mr Li had warned Beijing against.
The chief obstacle to the East-West tie-up is political risk. Cross-border exchange deals often founder on national sensitivities, as happened with the’s proposal would mean a Chinese firm owning the main equity markets of Britain and Italy and key clearing infrastructure for European debt markets. British politicians and regulators, desperate to juice up the economy post-Brexit, might prove relaxed. American and continental European ones probably will not.
Mr Li is no patsy for China. Last summer he tussled with Beijing when the Shenzhen and Shanghai exchanges blocked mainland investors from buying shares in Hong Kong-listed firms with dual-class structures.
Backers of the agreement with Refinitiv, the owner of Eikon data terminals, are therefore confident. They note the market’s welcome for the’s further expansion into data and analytics. The exchange’s shares had risen 20% from the date of that offer to just beforeswims in politically treacherous waters. China’s desire to exert control will have been one of the motives for the Hong Kong exchange’s London gambit.
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