UK finance minister to revive economic talks with china during january visit
Rachel Reeves, Britain’s finance minister, is set to visit China in January to revive high-level economic and financial discussions that have been on hold since 2019, according to sources familiar with the plans.
The visit marks an effort to thaw relations between the two nations and will see Reeves engage in a two-day trip to Beijing and Shanghai. She is scheduled to meet with China’s Vice Premier He Lifeng, often referred to as the country’s “economy tsar,” on 11th January. The meeting aims to restart the annual Economic and Financial Dialogue (EFD), which had previously served as a key forum for discussing trade and investment between the two countries.
Renewing economic dialogues
The resumption of the EFD is viewed as a significant step towards re-establishing broader economic cooperation. If progress is made during these discussions, there are plans to relaunch the Joint Economic and Trade Commission (JETCO) later in 2024. Historically held every two years, JETCO has been another vital platform for fostering UK-China trade relations.
Additionally, British businesses are lobbying for the revival of the UK-China CEO Council, an initiative introduced in 2018 by then-Prime Minister Theresa May and former Chinese Premier Li Keqiang. This council brought together business leaders from both nations to enhance trade and investment ties.
Rachel Reeves’ visit coincides with broader efforts to reinvigorate trade relations, as demonstrated by HSBC Chairman Mark Tucker’s upcoming business delegation visit to China, which aims to bolster investment, particularly in financial services.
Strengthening business ties
Following her meeting in Beijing, Reeves will travel to Shanghai on 12th January to meet British companies operating in China. This visit is expected to provide an opportunity for UK businesses to discuss their challenges and opportunities in the Chinese market.
Britain’s decision to revive these economic dialogues comes after a hiatus prompted by strained relations. Most economic discussions were suspended in 2020 following Beijing’s introduction of a national security law in Hong Kong, a former British colony. Since then, ties have been further tested by allegations of spying, geopolitical tensions stemming from the war in Ukraine, and sanctions placed on lawmakers by both sides.
A shift in policy
The Labour government, which has been in power since July, has identified improving ties with China as a key foreign policy priority. This marks a shift from the approach taken by successive Conservative administrations, during which relations with Beijing deteriorated significantly.
In 2022, then-Prime Minister Rishi Sunak declared the end of a “golden era” in UK-China relations. This era, championed by former Prime Minister David Cameron, had seen frequent high-level trade discussions and initiatives such as the London-Shanghai Stock Connect scheme, Britain’s membership in the Asian Infrastructure Investment Bank, and collaboration on green technologies, including the UK’s Hinkley Point C nuclear power plant.
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The road ahead
Reeves’ upcoming trip represents a renewed effort to rebuild trust and cooperation between the two nations. The EFD and JETCO forums, if re-established, could pave the way for more collaborative projects and investments, potentially benefiting both economies.
However, challenges remain. Critics in the UK continue to raise concerns over China’s human rights record, its treatment of Hong Kong, and its growing global influence. Similarly, in China, trust in Britain has been affected by what Beijing perceives as an increasingly sceptical stance from Western countries.
Rachel Reeves’ visit will therefore be closely watched, not only for its potential impact on UK-China relations but also as a barometer for how Britain navigates its role in a rapidly evolving global economic landscape.
For now, the revival of these discussions signals a willingness from both sides to explore common ground, setting the stage for what could be a new chapter in UK-China relations. Whether this will lead to tangible outcomes remains to be seen, but the stakes for economic cooperation have rarely been higher.
