The potential for Shein to list in London took a big step forward last week thanks to a significant political pivot from the Prime Minister.
Relations between the UK Government and President Xi of China have been sour for several years - becoming increasingly hostile during the Hong Kong protests and diplomatic tensions over human rights abuses. A far cry from October 2015, when David Cameron took President Xi to a country pub for a pint of Greene King IPA as a toast to their closer economic ties.
Just last year, the then Foreign Secretary James Cleverly said the UK Government “did not want the long arm of the Chinese Communist Party reaching towards the central nervous system of our country.”
However, the meeting between Starmer and Xi - which is the first time a British prime minister has met the Chinese leader in over six years - concluded with a surprising outcome when Xi said Britain and China can “break new ground” in their relationship under a Labour government.
In a diplomatic win for the prime minister, the Chinese leader used Labour’s own political slogan to praise Starmer, saying the new government was “working to fix the foundations of the economy and rebuild Britain”.
These foundations may start this January with the IPO of Shein on the London Stock Exchange. The Chinese-founded online fast-fashion giant is targeting early next year for its £50 billion blockbuster UK float.
Shein originally filed papers with the UK markets regulator in June, but said at the time, that no final decision had been made regarding the timing or size of the IPO.
According to City commentators, progress seems to be very slow. This is most notably due to investor scepticism over regulatory pushback from Shein’s prior attempts to list in New York and Singapore alongside reservations toward labour practices in Shein’s operations and supply chain processes.
Earlier this year, the Business Secretary, Jonathan Reynolds, said Shein would need to meet “ethical and moral targets” on “all aspects of business” if it listed on the London Stock Exchange, adding that he would want to discuss business practices with Shein if it wanted to conduct further business activity in the UK.
However, last month, the UK government said it plans to leave scrutiny of Shein’s pursuit of a stock listing in London to the country’s financial regulator, the Financial Conduct Authority, sparing the Chinese fast-fashion retailer the sort of in-depth review of its employment practices that many in the Labour Party and opposition want.
Starmer’s strategic pivot and pitch to cajole China back into positive economic discussions comes in the week that Shein was reportedly preparing to hold an official investor roadshow, during which meetings are held between the management team of a company raising money and institutional investors.
Shein, which is understood to be working with US investment banks Goldman Sachs, JP Morgan and Morgan Stanley on the float, may well be the spark that reignites the London Stock Exchange from its dying embers.