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During a visit to Beijing on Saturday, British treasurer Rachel Reeves emphasized London’s potential as a prime destination for Chinese financial activities, amid domestic economic challenges involving bond market volatility.
As the highest-ranking British official to make a diplomatic visit to China since former Prime Minister Theresa May’s meeting with President Xi Jinping in 2017, Reeves’s trip coincided with British government bond yields reaching their highest point in 17 years, creating additional challenges for the Labour Party’s economic recovery plans.
At the recommencement of previously suspended financial discussions between the two nations, Reeves emphasized that London could serve as “a natural home for China’s financial services firms” and your clients raising capital, and a launchpad for Chinese firms seeking to build a global footprint.”
Chancellor Rachel Reeves is currently doing deals in China.
Are you happy about this? pic.twitter.com/Xuu159arou— Rachel (@RachelA1892) January 11, 2025
During a subsequent media briefing, she announced that agreements reached during the talks would generate £600 million ($732 million) in economic benefits for Britain over a five-year period, though specific details weren’t provided. She also highlighted the progress made in various sectors including financial services, trade, investment, and climate initiatives.
He Lifeng, China’s Vice Premier, noted that “as long as China and the UK respect each other… relations between our two countries can develop in a healthy way.”
Despite facing domestic pressure to address the financial crisis at home, Reeves proceeded with what was described as a “long-standing” trip by Prime Minister Keir Starmer’s office. During a visit to Brompton’s Beijing bicycle showroom, she acknowledged recent market fluctuations while affirming her commitment to previously established fiscal policies.
The diplomatic mission included participation from both the Bank of England governor and the UK’s Financial Conduct Authority chief executive. It reflects Starmer’s broader strategy to rebuild UK-China relations, balancing economic opportunities with concerns over human rights and China’s position on the Ukraine conflict.
Recent tensions between the two nations have been exacerbated by allegations of a Chinese businessman’s alleged espionage activities involving Prince Andrew, claims that Beijing has firmly rejected as “preposterous.”
‘It doesn’t benefit us, it benefits China!’
Caller Barry thinks it is ‘completely misguided’ for Rachel Reeves to be in China as concerns about the UK’s economy grow. pic.twitter.com/8elZSJBPjq
— LBC (@LBC) January 11, 2025
Addressing areas of disagreement, Reeves highlighted concerns about national security, market access, industrial policies, and “Russia’s illegal war in Ukraine… and Hong Kong, where we have concerns on rights and freedoms, but where we also have shared interests.”
He responded by reiterating China’s stance as “neither a creator of the Ukraine crisis, nor a direct party” to the conflict, while suggesting Hong Kong could serve as a bridge for enhanced bilateral cooperation.
The relationship between Britain and China has been particularly strained since 2020, when Beijing implemented extensive national security legislation in Hong Kong, significantly restricting freedoms in the former British territory.
