Britain’s economy will benefit from a £600million boost thanks to the Labour Government’s latest deal with China, the Treasury claims.
Chancellor Rachel Reeves is touting the 2025 UK-China Economic and Financial Dialogue (EFD) agreement following her trip to Beijing this weekend.
The Chancellor was hosted by Vice Premier He Lifeng in the Chinese capital as part of an attempt to improve the relationship between the UK and China. Both nations agreed to deeper cooperation across areas such as financial services, trade and investment.
According to the Treasury, Labour’s attempts with reengagement with China is likely to deliver up to £1billion of value for the UK economy. However, Reeves emphasised Britain will challenge the global superpower on areas of disagreement, including China’s support of Russia and sanctions on MPs.
Reeves explained: “The agreements we’ve reached show that pragmatic cooperation between the world’s largest economies can help us boost economic growth for the benefit of working people – a priority of our Plan for Change.
“More widely, today is a platform for respectful and consistent future relations with China. One where we can be frank and open on areas where we disagree, protecting our values and security interests, and finding opportunities for safe trade and investment.”
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The British economy will receive a £600million boost with Rachel Reeves’s latest deal with China, the Treasury claims
PA
As part of the meeting, multiple financial services firms with a stake in the Chinese market were included in the Chancellor’s delegation. Among them included HSBC, Standard Chartered, Prudential, Schroders, abdrn, Fidelity International and London Stock Exchange Group.
Under the 2025 UK-China Economic and Financial Dialogue (EFD), new licences and quota allocations will be granted for for UK firms to improve their business on the continent and strengthen ties.
Furthermore, initiatives will be launched to enhanced capital market connectivity, pensions, clamping down on illicit finance and sustainable finance cooperation. China confirmed plans to issue an inaugural overseas sovereign green bond, to fund environmentally sustainable projects, in London over the next year.
Both nations will work on a Wealth Connect programme to recognise how role asset management is important in assisting growth. The Government hopes today’s deal will “provide significant value” to Britain’s economy over the next five years at least.
During the meeting, Reeves shared her concerns over existing imbalances within the Chinese economy, lifting barriers on restricted goods to Britain and improving open channels for disagreement.
Notably, the Chancellor urged her Chinese counterpart to stop its support for Russia’s defence industrial base, which is enabling Putin to maintain its invasion and occupation of Ukraine.
On top of this, Rachel Reeves highlighted the case of British National Jimmy Lai as evidence of China’s attempt to interfere in the UK’s democratic process and protecting civil rights for residents in Hong Kong.
She also raised human rights abuses, including in Xinjiang, and forced labour during her appearance in Beijing.
Britain is improving financial relations with China as part of Rachel Reeves’s economic agenda
Reuters
On the meeting, HSBC’s group chairman Sir Mark Tucker said: “We welcome the fact that the UK China Economic and Financial Dialogue – and the Financial Services Summit – are taking place for the first time since 2019.
“China is the world’s second largest economy, the world’s top goods exporter, second largest source of merchandise imports and the UK’s fourth largest trading partner. Deepening the UK-China partnership on trade, investment, finance, health, education and climate change amongst other priority areas, is vital to the UK.”
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José Viñals, group chairman of Standard Chartered, added “The UK-China Economic and Financial Dialogue is both valuable and important to us and our clients.
“As a UK-headquartered bank with a long history in China, we continue to see significant growth potential and opportunities to collaborate, as evidenced by the permission to trade China Treasury Bond Futures and receipt of our Type A Bond Underwriting licence.”
Lord Sassoon, the president of the China-Britain Business Council, shared: “UK-China Economic and Financial Dialogues have had a significant impact on generating investment, jobs and profitable business for the UK over many years.
“The resumption of the EFD is welcomed by our members, both in financial and professional services, but also across the wider economy.”
