BEIJING (AFP) – British treasurer Rachel Reeves said yesterday that London was a “natural home” for Chinese finance during a visit to Beijing in the shadow of bond market turmoil back home.
Reeves, whose formal title is chancellor of the exchequer, is the most senior British government official to visit China since then-prime minister Theresa May held talks with President Xi Jinping seven years ago.
The trip comes as the yield on British government bonds reached a 17-year high this week, further complicating the ruling Labour Party’s sputtering efforts to revitalise growth.
The increase makes it more costly for the government to finance current operations and repay debt, raising risks it will have to make spending cuts or hike taxes.
Speaking at the reopening of long-suspended finance talks between the two countries, Reeves said London was 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”.
She hailed “opportunities to deepen connections” on capital markets, but said both countries needed to work more closely on “regulatory cooperation”.
At a later press briefing, Reeves said “common ground” had been found on financial services, trade, investment, climate change and other areas.
She said the total value of what had been agreed would be worth GBP600 million (USD732 million) for the British economy over the next five years, without giving specific details.
Her Chinese counterpart, Vice Premier He Lifeng, said experience showed that “as long as China and the United Kingdom (UK) respect each other… relations between our two countries can develop in a healthy way”.
Reeves faced pressure from the parliamentary opposition to stay home and address the financial crisis, but a spokesperson for Prime Minister Keir Starmer said this week she had not planned to cancel her “long-standing” trip.
On a visit to British bicycle-maker Brompton’s Beijing showroom earlier yesterday, Reeves acknowledged “moves in global financial markets over the last few days”, but said the fiscal rules she set out in her October budget were “non-negotiable”.
“Growth is the number one mission of this government, to make our country better off,” she said, adding that her visit would “unlock tangible benefits for British businesses”.
The governor of the Bank of England and the chief executive of the UK’s Financial Conduct Authority also took part in the visit.
Starmer has sought to reset the UK’s diplomatic relationship with China, balancing opportunities for trade and cooperation.
In November, Starmer became the first British prime minister to meet Xi since 2018, when the pair spoke at the G20 summit in Brazil.
