China and the UK restart economic and financial talks after a 6-year hiatus

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TAIPEI, Taiwan (AP) — China and Britain resumed economic and financial talks Saturday after a six-year hiatus during a visit by Britain’s Chancellor of the Exchequer to Beijing, as the U.K.’s Labor government seeks to reset tense relations with the country’s second-largest economy. the world. .

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Chancellor Rachel Reeves, accompanied by a delegation of British business and financial officials, met Chinese leaders, including Vice Premier He Lifeng and Vice President Han Zheng.

Reeves stressed the need for a “stable and workable” relationship between the UK and China as she concluded her talks in Beijing.

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“Our two countries can work together in areas of mutual interest in the best interests of our citizens, while also being frank and open with each other when we disagree,” she said.

Sino-British relations have been strained after a series of spying allegations on both sides, China’s support for Russia in the Ukraine war and the suppression of civil liberties in Hong Kong, a former British colony.

British officials said Reeves will also urge Beijing to stop its material and economic support for the Russian war effort in Ukraine and raise the issue of rights and freedoms in Hong Kong.

Reeves said the two sides signed agreements on Saturday in areas such as financing “worth 600 million pounds ($732 million) over the next five years for the UK economy,” without specifying details of the deals.

“Overall, this government’s re-engagement with China already puts us on track to deliver up to £1 billion of value to the UK economy,” she said.

Reeves’ three-day trip was overshadowed by turmoil in bond markets, pushing borrowing costs to their highest level 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.

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In an op-ed in The Times of London, Reeves insisted that China offered Britain an opportunity to boost growth. She said the nation cannot ignore the fact that China is its fourth largest trading partner, with exports supporting nearly half a million UK jobs.

“Choosing not to engage with China is not a choice at all,” she wrote.

Reeves’ visit marks a revival of the China-UK Economic and Financial Dialogue, annual bilateral talks that have been suspended since 2019 due to the COVID-19 pandemic and deteriorating relations. London hopes that renewed dialogues will help remove barriers that British companies face when looking to export or expand to China.

Reeves added that Britain is seeking to improve exchanges in areas such as sustainable finance, connectivity to capital markets, pensions and regulatory harmonization, as well as trade and investment.

“As part of this, it is important to prevent economic ties from weakening our national security and economic resilience,” she said.

She said she welcomed China’s plans to issue its first offshore sovereign green bonds in London this year.

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Reeves added that the meeting also focused on finding ways to lift market access barriers to goods and services, “including the launch of a package in agri-food set to boost UK trade with China”.

The Vice Premier said that China and Britain agreed to remove barriers to investment in areas such as clean technology, life sciences, digital technology and financial services.

The delegation included Governor of the Bank of England, Andrew Bailey, and the executives of the UK Financial Conduct Authority and the London Stock Exchange Group. The meeting also included senior executives from some of Britain’s largest financial services companies, including the heads of HSBC Group and Standard Chartered.

Reeves’ visit comes after Foreign Secretary David Lammy traveled to China in October and Prime Minister Keir Starmer met with Chinese President Xi Jinping on the sidelines of the G20 summit in Brazil in November.

It’s all part of an attempt by Starmer, who was elected as leader in July, to strengthen political and economic ties with China, the UK’s fourth-largest single trading partner, according to the Treasury.

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The officials said Starmer wanted a “pragmatic” approach to working with Beijing on global stability, climate change and the transition to clean energy. But some in the opposition Conservative Party criticized his stance and said trade ties should not come at the expense of national security and human rights concerns.

British political leaders and intelligence chiefs have repeatedly warned that China poses security threats. Calls to address that challenge rose last month when it emerged that an alleged Chinese spy had cultivated close ties with Prince Andrew and conducted “covert and deceptive activity” on behalf of 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 make sure that we have good, working relationships with countries around the world. This is in our national interest.”

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Associated Press writers Sylvia Hui and Danica Kirka in London and video producer Caroline Chen in Beijing contributed to this report.

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