“By finding common ground on trade and investment while being honest about our differences and keeping national security the first duty of this government, we can build a long-term economic relationship with China that works on national interest”.

The City of London is already the world’s largest transaction center for renminbi foreign exchange trading and the world’s second largest renminbi payment center.

Around 52 billion renminbi (£5.7 billion) is stripped in the capital every day, according to figures from the City of London Corporation.

This is partly due to the presence of the London branch of China Construction Bank, the world’s largest offshore renminbi clearing bank, but also because of London’s international profile and time zone.

Financial services are the UK’s biggest service export to China outside of travel, accounting for £1.6 billion of annual trade, according to the Office for National Statistics. However, it was down 9% on the previous year, reflecting a wider drop in trade between the two countries.

Monk says there had been more interest in China from his UK customers in recent months, perhaps reflecting the changing mood music in Westminster.

“There’s a bit of a thawing of that very anti-Chinese sentiment right after Covid,” he says.

“Most of the companies we dealt with said ‘we don’t want to go to China’ because they might upset some of their Western counterparts. There was a lot of (a feeling of) ‘we don’t want to go to China.’

“But the last three or four months there’s been less than that. All of a sudden people are calling saying ‘we need to get to China’ or ‘we’re talking to this Chinese counterpart.’

According to a leaked draft memo, a central topic of conversation between Reeves and Chinese officials will be reviving the much-maligned Shanghai-London Stock Connect.

The project, which was the brainchild of George Osborne, the former chancellor, was created to allow the easier listing of UK company shares on the Chinese stock exchange and vice versa.

Huatai Securities, China Pacific Insurance Company and SDIC Power Holdings, a state-backed utility, listed shares in London through the mechanism after its initial launch. But they are among six Chinese companies to do so since the program was launched in 2018, while no London-listed company has opted to list shares in Shanghai.

The link struggled to gain traction amid worsening relations between the two countries after the “golden era” ushered in by former prime minister David Cameron came to an end.

The tightening of Communist Party rule under Xi Jinping, including greater control over Hong Kong and fears of Chinese espionage in the UK has led to greater skepticism in Westminster.

In recent defense reviews, the government described China as a “systemic competitor”.

In 2022, the government forced Chinese manufacturer Nexperia to sell a stake in a key microchip factory in Newport for reasons of national security. It also bought China General Nuclear’s stake in the Sizewell C nuclear power plant over safety concerns.

Alicia Kearns, a former member of the Foreign Affairs and National Security Committee, says: “National security cannot be sacrificed on the altar of the economy, and we would be wrong to think that China’s economy does not benefit from relations with us”.

The attitude in the City is more optimistic. As one City figure says: “Capital has no nationality, it just drives things and we need more energy in the UK.

“People say they don’t trust the Chinese, but why wouldn’t we trust the Chinese but the Americans or the Germans? Every nation looks out for its own interests. China is no different from that.

“American capital has a strong link with the American government, for example, this is what countries do. China is no different than anywhere else.”

The revival and success of the Shanghai-London Stock Connect could give a substantial boost to Britain’s struggling stock market, as well as attract more Chinese capital to the UK.

New data released this week shows that British-focused investment funds suffered the highest level of withdrawals in history last year, with outflows of £9.6 billion.

In total, £45bn has left UK funds over the past decade, while the share of assets invested in UK shares by UK pension funds has fallen from 53% in 1997 to 4.4%.

The new listings will not only improve the vibrancy of the market at a time when it is struggling to attract new companies, but may help attract more Chinese capital.

Monk says: “The Chinese policy is that if you want to go buy a company in England, do it right because it’s a bridgehead. China is now allowing money to flow out of it to gain strategic positions in certain industries outside of China.”

Reeves’ China trip also comes against the backdrop of a possible London listing for fast fashion retailer Shein. The company has filed for a £50 billion IPO in Londondespite concerns about its ethical record.

If it happens, it could encourage other big Chinese companies to explore a listing in London, especially if New York closes its doors as Donald Trump takes power in Washington.

However, doubts about whether Shein will continue with the list were fueled this week by a difficult session of the Commons business and trade select committee.

MPs said the answers given by Yinan Zhu, Shein’s general counsel for Europe, the Middle East and Africa, “bordered on contempt” after she dodged questions about whether forced labor exists in the supply chain of your company

For activists who have warned of China’s growing crackdown on Hong Kong, the government’s bid to boost economic ties puts British interests at risk.

Reeves’ trip comes days before Trump’s inauguration and trying to attract more Chinese capital to the UK could complicate relations with the US.

The UK’s ties to China have caused problems in the past. Britain’s telecoms industry already suffered a damaging hit after the US turned on Huawei. Washington leaned on the United Kingdom to follow suit, eventually forcing billions of pounds worth of equipment out of the UK’s infrastructure.

As Reeves travels to Beijing, his bet on China to help revive Britain’s stock market and boost growth looks high-risk at best. And as the bond market turmoil continues at home, the chancellor is open to the charge that she is “missing in action”, as Mel Stride, the shadow chancellor, said this week.

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