Ahead of May's visit, Brits take look at post-Brexit business ties with Beijing

Updated 2018-01-31 09:10:05 China Daily

China's relationship with the UK after it leaves the European Union will come under focus, with British Prime Minister Theresa May set to begin a three-day visit to China on Wednesday.

May will aim to build on the "golden era" of relations between the two countries forged when President Xi Jinping made a state visit to the UK in October 2015.

May, who will go to Shanghai and Wuhan as well as Beijing, will lead a delegation of leading business figures including senior executives from the HSBC and Standard Chartered bank groups and the London Stock Exchange. Britain is trying to promote its expertise in financial services.

Her visit follows that of another leading European politician, French President Emmanuel Macron, to Beijing earlier this month. It will be May's first visit to China since attending the G20 Summit in Hangzhou in September 2016.

Lady Barbara Judge, chair of the Institute of Directors, one of the UK's leading business organizations, who was visiting Beijing ahead of the British prime minister's arrival, said May coming to China was particularly important for Britain, with Brexit looming. The UK is scheduled to leave the EU in March 2019.

"No one is yet sure of what the ultimate outcome of the Brexit negotiation will be, but, whatever happens, both the friendship and trade relations between the UK and China will be paramount," Judge said.

"The fact the prime minister has chosen to come here with a big business delegation is evidence of the fact that our government and investor and trade establishment feel that China is of prime importance as a trading partner for the UK."

Liu Xiaoming, China's ambassador to Britain, said it was important to build on the success of Xi's trip to the UK and to cement cooperation in other areas, including China's Belt and Road Initiative.

"The forthcoming visit is a chance for the UK and China to show they have well in mind the larger picture of the international landscapes as their bilateral relations and respect each other's core interests and major concerns," he said.

During Xi's trip to the UK, some 30 billion pounds (.07 billion, 266.7 billion yuan) of trade agreements were reached between the two countries, including a 6 billion pound investment in the new Hinkley Point C nuclear power plant in Somerset as well as investment in the UK's new HS2 high-speed rail network.

The UK had a trade deficit with China of 25.4 billion pounds in 2016, but this is likely to be reduced, with China in the future expected to have a huge appetite for the country's services.

Britain's services exports to China in 2016 were 3.3 billion pounds, 35 percent of which comprised travel services with the UK being a major destination for Chinese tourists, according to official UK data. Overall it had a trade surplus in services of 1.7 billion pounds.

Motor vehicles were Britain's largest export category, making up 3.7 billion pounds of the 16.8 billion pounds in total exports. China was the UK's eighth-largest export market and fourth-largest source of imports in 2016.

One of May's priorities will be to lay the groundwork for a free-trade agreement between Britain and China after Brexit, although because of still being a EU member no specific terms can be discussed.

"The UK can't do any bilateral agreements now because it is still a member of the European Union, but they can talk in general about how things can work and indicate a desire to go forward when the time is right," Judge said.

Liam Halligan, the economist and commentator, said leaving the European Union will create an opportunity for the UK to sell more of its services to China with its historic links to Hong Kong giving it an advantage.

"The UK is the world's biggest exporter of financial services and none of the other EU countries are anywhere near us on financial services," he said.

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