China and Britain have restarted economic and financial talks after a six-year hiatus during a visit by Britain’s Chancellor of the Exchequer to Beijing, as the UK’s Labour government seeks to reset strained ties with the world’s second-largest economy.
Accompanied by a delegation of British business executives and finance officials, Treasury chief Rachel Reeves met with Chinese leaders, including Vice Premier He Lifeng and Vice President Han Zheng.
Reeves emphasised the need for a “stable, pragmatic” UK-China relationship.
“Our two countries can work together on areas of mutual interest in the interests of our citizens, whilst also being frank and open with each other when we disagree,” she said.
Sino-British ties soured following a series of spying allegations from both sides, China’s support for Russia in the Ukraine war and a crackdown on 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.
The two sides inked agreements on Saturday in areas such as finance “worth 600 million pounds ($A1.2 billion) over the next five years for the UK economy,” Reeves said without outlining the specifics of the deals.
“Overall, this government’s re-engagement with China already sets us on course to deliver up to 1 billion pounds ($A2.0 billion) of value for the UK economy,” she said.
Reeves’s three-day trip has been clouded by upheaval in the bond markets, which has pushed borrowing costs to their highest level since the 2008 financial crisis.
The opposition Conservative Party has accused her of having “fled to China,’’ rather than addressing market concerns about inflation and economic stagnation.
In an op-ed piece in the Times of London, Reeves insisted that China offers Britain an opportunity to bolster growth.
The nation cannot ignore the fact that China is its fourth-largest trading partner, with exports supporting close to half a million jobs in the UK, she said.
“Choosing not to engage with China is therefore no choice at all,’’ she wrote.
Reeves’ visit marked the 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 renewed dialogues will help bring down barriers that UK businesses face when looking to export or expand to China.
Britain seeks to improve 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 important to prevent economic links weakening our national security and economic resilience,” she said.
She said she welcomed China’s plans to issue its first overseas sovereign green bond in London this year.
The meeting also focused on finding ways to lift market access barriers for goods and services, “including unlocking a package in agrifood which is set to boost UK trade with China,” Reeves added.
Vice Premier He said China and Britain agreed to remove barriers to investment in areas such as clean technology, life sciences, digital technology and financial services.
Reeves’ visit comes after Foreign Secretary David Lammy travelled 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 a bid to strengthen political and economic ties with China.
