BEIJING: During her recent visit to Beijing, British Chancellor of the Exchequer Rachel Reeves proclaimed on Saturday (January 11) that London stands out as an ideal hub for Chinese financial activities, all amidst significant turbulence in the bond market back home.
This trip marks the first instance of a senior British government official visiting China since former Prime Minister Theresa May’s discussions with President Xi Jinping seven years ago.
The timing is noteworthy, as yields on UK government bonds surged to their highest point in 17 years this week, complicating efforts by the ruling Labour Party to stimulate economic growth.
The rise in yields increases borrowing costs for the government and heightens concerns about potential spending cuts or tax hikes necessary for managing existing debt and operational expenses.
At the reopening of finance dialogues between China and the UK, Reeves emphasized that London serves as an ideal environment for Chinese financial service providers and clients looking to access capital. She also highlighted it as a stepping stone for Chinese enterprises aiming to expand their global presence.
Reeves expressed optimism about enhancing ties within capital markets while stressing that both nations need to strengthen their regulatory collaboration.
In a subsequent press conference, she remarked that mutual understanding had been achieved concerning various sectors including financial services, trade relations, investment opportunities, climate initiatives, and more.
She projected that these agreements could yield approximately £600 million (around US$732 million) in benefits for the British economy over a five-year span while withholding specific details regarding these arrangements.
Meanwhile, China’s Vice Premier He Lifeng highlighted that historical evidence suggests healthy bilateral relations can flourish when both countries maintain respect towards each other.
Despite facing criticism from opposition lawmakers urging her to remain in Britain during this time of economic distress, a representative from Prime Minister Keir Starmer’s office indicated this week that Reeves intended to proceed with her pre-planned trip without adjustments.
Dedicating time at Brompton’s showroom in Beijing earlier Saturday—a premier British bicycle manufacturer—Reeves acknowledged recent fluctuations within global financial markets but insisted on sticking firmly to the fiscal principles outlined in her October budget presentation.
“The priority remains focused on advancing growth; our aim is clear: improving circumstances for our nation,” she declared, adding that her visit would serve as a catalyst for tangible advantages benefitting British enterprises directly.
The delegation accompanying Reeves included notable figures such as the Governor of the Bank of England along with officials from the UK’s Financial Conduct Authority who participated actively throughout this important diplomatic mission.
