The U.K.’s rush to embrace trade with China in recent years has raised its exposure to the market turmoil surrounding the world’s second largest economy.
On Monday, stocks listed on London’s benchmark FTSE 100 lost a combined £74 billion ($117 billion) in the index’s 10th successive day of falls, after concerns about China’s economy caused panic in stock markets.
George Osborne, the U.K.’s Chancellor of the Exchequer, told reporters on Monday: “I would take it as a reminder that we are not immune from what happens in the world.
“Britain is a very open economy…so we are affected by what happens, whether it’s problems in the euro zone, problems in Asian financial markets.”
The U.K. has courted Chinese trade, in everything from financial services to pig semen, assiduously in recent years. While the U.K.’s financial sector has shrunk its exposure to most foreign countries since the 2008-2009 credit crisis, loans to China have almost quadrupled since then, according to RBS.
Osborne himself has been at the forefront of attempts to make London a hub for renminbi trading – which looks like a much less lucrative business after this month’s turmoil.
The benchmark Shanghai Composite index sunk once again on Tuesday, closing down by 7.6 percent, at its lowest since December 2014.