China uk economic relationship

The forecast for British-Chinese relations in a storm on the horizon

china uk economic relationship

Chancellor Philip Hammond has described the UK's relationship with China as " more important than ever", as he hosted the country's vice-premier for trade talks . The forecast for British-Chinese relations in a storm on the horizon Though increased interactions with China, including trade and. Chinese-United Kingdom relations . - The Sino-British Trade Committee formed as semi-official trade body (later merged with the Group.

It covers subjects from trade and investment to climate change and human rights — as well as more mundane functional issues. To be fair to the EU, although there are sometimes splits between EU member states and turf wars with the EU institutions over China, there are no fundamental differences over how to engage Beijing.

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The hope behind EU policy has been that institutionalised engagement with China will, over time, encourage it to alter its policies for example, on market access for European goods and on human rights and produce a sense of shared Chinese and European interests. Experience from more than two decades of this strategic partnership suggests that the impact has been limited.

China trade 'more important than ever to the UK' - BBC News

China has become more, not less authoritarian, in particular under the leadership of President Xi Jinping, and its human rights record has not improved.

European companies continue to complain of problems with market access. Beijing regularly deploys divide and rule tactics against the EU, using economic carrots and sticks to reward or punish European states. Whether Britain will be able to conclude a post-Brexit trade agreement with China depends on whether it will remain in a customs union with the EU.

New phase in Golden Era for UK-China relations

If we assume that Britain will indeed be able to conclude independent trade agreements, what challenges might it face with regards to China?

The developed Western economies all agree on the main problems in trade with China: Over the past decade or so, the US, the EU and Japan have made some progress in persuading the Chinese government to alter its policies in these areas — but that progress has been slow and limited.

china uk economic relationship

Unless Britain is willing to offer significant concessions to China, it is difficult to see the Chinese government offering the UK a trade deal better than those that may be on the table for the EU, the US and Japan. Britain could offer China preferential access to the British market in the hope that would persuade China to reciprocate, but that might threaten British industries and, since Britain would need such a deal more than China, the terms might not be attractive.

Radical advocates of free trade argue that the UK could unilaterally open its economy to goods and services from China and other countries, with losses in industries facing cheaper imports offset by new economic activity generated by the process of creative destruction.

British companies and workers, however, are unlikely to find this a palatable option.

The Heat: China-UK relations Pt 1

What about possible new Chinese investment in Britain? China wants to use bilateral Free Trade Agreements FTAs to promote stable and sustainable economic growth at homewhich will reinforce the legitimacy of the Chinese Communist Party. It also believes that FTAs can combat protectionismin the form of trade defence measures or restrictive investment regulations that discriminate against China. Achieving recognition for China as a market economy under WTO rules is central to this strategy.

Highlights of China-UK economic and trade ties - Xinhua |

China also needs FTAs to improve its economic capability. European economies have a competitive edge in many sectors that can be captured through Chinese investment green energy initiatives, low carbon strategies, and advanced environmental technologies.

Britain, a leading services provider and high technology innovator with an open attitude to inward FDI, is a perfect fit for this approach. Constraints However, political constraints are likely to reduce the scope for achieving a closer UK-China economic partnership.

Whenever negotiations begin, the UK will discover, as the EU and US have, that political imperatives in China shape the parameters for granting market access to foreign companies. Meanwhile, the UK will come under pressure from its closest international partners, the EU and the US, not to be over-accommodating towards China.

china uk economic relationship

Any EU-UK partnership agreement will be made conditional on UK compliance with EU norms and good practice in economic management, such as limiting state aid. It would likely oppose any move that reduces pressure on China to abide by international trade rules, such as granting China market economy status under WTO rules. Prospects Nevertheless, it may be possible to negotiate a modest UK-China FTA provided, of course, that the EU finally accepts the UK proposal that it should remain free to negotiate tariff rates with third countries while staying in a customs partnership with the EU.

One successful European engagement offers lessons for the UK. Most Swiss duties on goods from China were reduced to zero immediately while most tariffs on products exported to China are to be eliminated over the next few years.

In services the agreement offered little more than WTO norms but two concessions stood out: