Britain, China strike stock market deal

China and Britain agreed on Monday to prioritize opening China's stock markets to foreign companies and to arrange for more Chinese firms to list on London exchanges.

No timetable has been set for opening China's stock markets but British officials said HSBC was at the forefront of negotiations. They emphasized an urgency to make it easier for Chinese firms to float in London within months.

Authorities in Shanghai, China's financial hub, said earlier on Monday they would allow overseas firms to list on the Shanghai Stock Exchange at an appropriate time.

"We have agreed actions to support British companies listing in China and Chinese companies listing in the UK," British finance minister Alistair Darling told reporters after meeting Chinese Vice Premier Wang Qishan in London.

There are about 70 Chinese firms listed on London's stock exchanges and Britain wants to raise that total to 100 by 2010.

"We'll consider opening the foreign exchange control when foreign companies are allowed to list and trade," Hu Xiaolian, head of China's State Administration of Foreign Exchange, told reporters.

"But we also have to consider the overall balance of foreign currency flows."