Interview: City of London, Hong Kong join forces to boost Belt and Road Initiative, says official

LONDON, Dec. 19 (Xinhua) -- Two of the global financial hubs the City of London and Hong Kong will be working closely together to provide financing, and legal and insurance expertize for the China-proposed Belt and Road Initiative, a leading City of London executive has said.

"The Belt and Road Initiative (BRI) is enormous, ambitious," and has been called by the Chinese leader as "the project of the century," Sherry Madera, City of London Corporation (CLC) special adviser for Asia told Xinhua in an exclusive interview on Tuesday.

Madera had just returned from Hong Kong where the CLC had officially joined Hong Kong's Infrastructure Financing Facilitation Office (IFFO) on Monday, a body run by the Hong Kong Monetary Authority (HKMA) to facilitate infrastructure investment and financing for the BRI.

Madera said the IFFO, founded last year, now had 80 entities taking part and aimed to be a knowledge-sharing platform, for discussions about infrastructure financing for the BRI and how that can be done efficiently.

"London is the only international city that has joined the IFFO," said Madera.

According to City of London Economic Research (CLER), London played a dominant role in global foreign exchange with daily turnover of 2.7 trillion U.S. dollars accounting for 41 percent of global share.

CLER figures for 2014 also showed that London dealt with 71 percent of international bond trading, that 20 percent of the global foreign equity market was listed there, and 18 percent of global cross-border lending was arranged in the city more than any other global center.

London sees the BRI as a project where it can profit by offering its special expertise, said Madera, and a joint approach with Hong Kong, itself a global financial center with a very particular role to play in Asia, would be a win-win for all parties.

"The City of London has a real strategic partner role in the IFFO, as defined by the Hong Kong Monetary Authority (HKMA) -- it is important for us to walk the walk," said Madera.

"This is a really good example of where London and Hong Kong are not competitors -- the pie on this is so big, and by being able to work together it is going to grow," she said.

The BRI is a project which has seen dozens of countries, regions and international organizations sign cooperation agreements with China.

Madera said that after attending the Belt and Road Forum in Beijing in May it was clear that there was a need to "mobilize private capital alongside government funds in order to build out Belt and Road infrastructure."

"This is going to need to be educational, cultural and business mindset that is going to have to happen; it is not just flipping a switch," said Madera.

EXPERTIZE IN LAW, INSURANCE, FOREX

London's expertize in law, insurance and foreign exchange trading, and its deep and liquid markets of capital could be of value to the building and expansion of infrastructure along the Belt and Road.

Cooperation between the City of London and Hong Kong would benefit the BRI and both parties, said Madera.

"As the deepest capital market in the world capital flows through London. It is the strongest infrastructure financing center, we have a history of structured finance and that is an obvious sharing point (with Hong Kong)," said Madera.

Madera said that London, as the second largest offshore center for trading renminbi (RMB) after Hong Kong, had a role to supplement and support Hong Kong in facilitating finance for BRI.

"It is going to be a matching of multiple currencies, and in that London is second to none as the number one global financial center for foreign exchange," said Madera.

Hong Kong and London's legal frameworks were very similar and were also a global benchmark used in transnational infrastructure projects, and these legal principles and templates could be utilized through the IFFO, according to the official.

London as the world's third largest insurance center had expertize to offer Hong Kong in the areas of geo-political insurance, climate change and environment insurance and cargo insurance for BRI projects.

"There is a real benefit from London's point of view to engage on those three topics of foreign exchange, the law and insurance," said Madera. Enditem