UK to gain foothold in Xiongan with a financial technology hub

Updated 2018-02-07 13:45:02

○ Beijing's brainchild, Xiongan New Area, sees Sino-UK partnership

○ Sino-British projects are expected to thrive in post-Brexit era

○ As Trump's America first strategy pushes England away, China embraces British cooperation

UK Prime Minister Theresa May recently completed her three-day visit to China with large business deals and mixed reactions from the East and West.

She unexpectedly announced plans to co-fund a technology center in China, but shied away from officially endorsing the Belt and Road initiative.

Among the many deals that were finalized during her trip, arguably the most notable was that China and the UK will jointly set up a new financial technology hub in Xiongan New Area in Hebei Province.

Established in 2017, Xiongan New Area, about 100 kilometers from Beijing, was selected by China's leadership to serve as a center for Beijing's "non-capital functions." It is described as "a strategy crucial for the millennium to come."

In February of 2017, Chinese President Xi Jinping called for a "world vision, international standards, Chinese characteristics and high goals" in the planning and construction of Xiongan New Area, Xinhua reported.

Zhao Junjie, a research fellow at the Institute of European Studies at the Chinese Academy of Social Sciences, told the Global Times that it was "wise" for the UK to choose Xiongan as a "foothold" to deepen Sino-British cooperation, as there is enough room for all in Xiongan.

Participating in a Sino-British finance and technology relationship with Xiongan may help Britain curry favor with the Chinese government in a post-Brexit era, which is exactly when the UK will desperately need to develop new partnerships with strong economies outside of Europe.

Post-Brexit blues

May brought with her to China a delegation of 50 business executives, the largest that her government has ever taken overseas.

But experts point out that while the UK government remains "pragmatic," pressure from its Western allies and a complicated domestic political situation may overshadow bilateral relationships with China.

May said at the China-UK Business Forum in Shanghai that "The UK is preparing to leave the European Union. We're seizing the opportunity to become an ever-more outward-looking Global Britain, deepening our trade relations with nations around the world - including China."

The UK's domestic situation has been gloomy at best following the Brexit vote. The Financial Times reported that the outcome of the referendum on EU membership in June of 2016 has had a "depressive effect" on the UK, which is likely to continue into 2018 and thereafter.

Zhao said that China and the UK complement each other's economies and that China will become a strong partner to help Britain out of its post-Brexit economic problems. "Now the UK has a higher demand from us than what we want from them," he said.

"The UK should show us its sincerity and bring its superior technology and high value-added programs to Xiongan. We don't need to usher in ordinary programs," he said.

"Britain should make best use of its advantages in technology, innovation and finance in Xiongan and convert them into money and real benefits for its country," he added.

Zhang Jianping, a research fellow with a center under the Ministry of Commerce, told the Beijing Business Today that the China-UK financial technology hub is the only large-scale cooperation program in Xiongan that has been achieved during recent foreign leaders' visits to China.

Zhao said that Britain should use its financial position to bring investment from other countries to China and introduce its advanced programs, including eco-cities, green energy and agriculture, to Xiongan as well as encourage more European talents to work here.

He noted that, during this process, the British government ought to change their old mindset of "not intervening in company operations" but rather pave the way for them to come to Xiongan.

"For instance, the UK government can give its small- and medium-sized companies some preferential policies to attract them to invest in Xiongan. Also, it can learn from the German government by setting up services centers in China to help these companies," he said.

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