Exploring the Impact: China and the UK's Economic and Financial Talks After 6 Years

Delegates from China and the UK engage in renewed economic and financial discussions after a 6-year pause, with national flags displayed prominently in the background.

TAIPEI, Taiwan (NB360) — China and the United Kingdom resumed economic and financial discussions on Saturday after a six-year pause, coinciding with the visit of Britain's Treasury chief to Beijing. This move comes as the U.K.’s Labour government aims to mend strained relations with the world’s second-largest economy.

Chancellor Rachel Reeves, accompanied by a group of British business leaders and finance officials, engaged with Chinese leaders, including Vice Premier He Lifeng and Vice President Han Zheng.

Reeves highlighted the importance of a “stable, pragmatic” relationship between the U.K. and China as she concluded discussions in Beijing.

“Our two nations can collaborate on mutual interests for the benefit of our citizens, while also being candid and open with each other when disagreements arise,” she stated.

The relationship between China and Britain has deteriorated due to a series of espionage accusations from both countries, China’s backing of Russia in the Ukraine conflict, and a crackdown on civil liberties in Hong Kong, a former British territory.

British officials mentioned that Reeves would also press Beijing to cease its material and economic support for the Russian military efforts in Ukraine and address the issue of rights and freedoms in Hong Kong.

On Saturday, the two parties signed agreements in areas such as finance, “worth 600 million pounds ($732 million) over the next five years for the U.K. economy,” according to Reeves, without detailing the agreements.

“Overall, this government’s renewed engagement with China already positions us to deliver up to 1 billion pounds of value for the UK economy,” she remarked.

Reeves’s three-day visit has been overshadowed by turmoil in the bond markets, which has driven borrowing costs to their highest point since the 2008 financial crisis. The opposition Conservative Party accused her of having “fled to China,” rather than addressing market concerns about inflation and economic stagnation.

In an opinion piece in the Times of London, Reeves argued that China presents an opportunity for Britain to enhance growth. She noted that China is the U.K.'s fourth-largest trading partner, with exports supporting nearly half a million jobs in the UK.

“Choosing not to engage with China is therefore no choice at all,” she wrote.

Reeves’ visit marked the revival of the China-U.K. Economic and Financial Dialogue — annual bilateral talks that had been suspended since 2019 due to the COVID-19 pandemic and worsening relations. London hopes these renewed dialogues will help reduce barriers faced by U.K. businesses aiming to export or expand to China.

Britain seeks to enhance exchanges in areas such as sustainable finance, capital markets connectivity, pensions, and regulatory alignment, as well as trade and investment, Reeves added.

“As part of this, it is crucial to prevent economic connections from undermining our national security and economic resilience,” she stated.

She expressed her welcome for China’s plans to issue its first overseas sovereign green bond in London this year.

The discussions also emphasized finding ways to remove market access barriers for goods and services, “including unlocking a package in agrifood which is set to boost U.K. trade with China,” Reeves added.

Officials mentioned that Starmer advocated for a “pragmatic” approach to collaborating with Beijing on global stability, climate change, and the transition to clean energy. However, some in the opposition Conservative Party criticized his stance, arguing that trade ties should not compromise national security and human rights concerns.

British political leaders and intelligence chiefs have repeatedly warned of security threats posed by China. Calls to address this challenge intensified last month when it was revealed that an alleged Chinese spy had developed close ties with Prince Andrew and engaged in “covert and deceptive activity” for China’s ruling Communist Party, according to officials.

“National security is the foundation of what any government acting in the national interest will prioritize,” Reeves said. “But we need to ensure that we have pragmatic and positive relations with countries worldwide. That is in our national interest.”

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News Blend 360 writers Belinda Foster in Los Angeles contributed to this report.