China Halts UK Stock Connect Over Hong Kong Rift  

Sources told Reuters Thursday that China is blocking a proposed merger to connect the Shanghai and London stock exchanges because of escalating political tension. 

The sources, which include government officials and people on the transaction team working to solidify the Shanghai-London deal, said the suspension via China was politically driven in response to Britain’s support of pro-democracy demonstrators in Hong Kong. 

One source told Reuters that “It’s not only a big blow to the companies looking to broaden the investor base via listings in London, but also to China’s links with global markets.” 

China has blamed the U.K. and the U.S. for its involvement in fueling social unrest in Hong Kong. 

Reuters noted that financial institutions involved in the deal are anxiously monitoring Prime Minister Boris Johnson’s relations with Beijing. 

A decision is looming by Johnson in the near term to either include or exclude Huawei Technologies from future British fifth-generation mobile networks. 

Washington has ramped up pressure on the U.K. to “push back” against using Huawei. 

Robert Strayer, a deputy assistant secretary of state, told the U.K. last summer that it must mitigate the risks of using Chinese telecoms in building its 5G mobile networks. 

“Given what is at stake and the uncertainty surrounding a rapidly evolving technology, we believe that using untrusted vendors anywhere in a 5G network introduces an unacceptable level of risk that cannot be mitigated,” Strayer told parliament last year. 

Chinese foreign ministry spokesman Geng Shuang told reporters Thursday that he’s not familiar with specifics of the breakdown in the proposed stock exchange merger.

“I would just like to stress that we hope the U.K. will provide a fair and just and open, non-discriminatory environment for Chinese businesses to invest there,” Shuang said.

“We hope it will create fair conditions for practical cooperation between the two countries.”

The U.K.-China relationship has been on a rocky road since summer when the U.K. sided with the U.S. and voiced their public support for pro-democracy demonstrators. 

Beijing has also been furious with the UK Royal Navy sailing its warships through the South China Sea.

The emergence of a multi-polar world is becoming more evident as anyone who sides with the U.S. and speaks negatively of China will have their access into one of the largest markets in the world suspended or revoked.