The ongoing Brexit negotiations will decide the future of the U.K. Though there are difference of opinions in the members discussion panel about how the exit should take place, the Prime Minister Theresa May would need to go distances to convince both parties to arrive at a unanimous decision. The European Union (EU) committee sought the final decision by the end of this week, but it seems difficult that any final decision will be reached owing to current scenario. The historic decision to exit from EU changed a lot of dynamics of the business world. Many companies had to move their headquarters from the country to one of the countries in the territory of EU. As the Brexit is confirmed, the country needs to explore other options to strengthen its trade ties outside the Europe. Recently, Theresa May visited China with 50 delegations from various sectors including healthcare, banking, clean energy, and others.
According to the trade official from the U.K., China has not provided any commitments after the visit as it awaits to see how the Brexit deal takes place. Though the U.K. has been restricted from making any trade agreements before leaving the EU, it has been laying a groundwork for trade ties with China in the future.
Richard Burn, the U.K.’s newly-appointed trade commissioner to China, outlined that the country has been trying to negotiate new deals and business ties with the world’s most populous country for the two-year period after the deadline of exiting the EU, March 2019. Burn, in an interview in Beijing on Wednesday, said, “China will be cautious about making any commitment until they see what we have agreed with the EU on that.”
During the visit of the PM Theresa May to China last week, two countries reviewed $77 billion trading partnership. The Chinese market will play a significant part in the future of British exports after the country leaves EU. Burn also stated that the groundwork will be influential in strengthening the trading relationship between two countries in the future. Once the country is free to negotiate deals, this groundwork will be helpful. The trade ties cover sectors such as financial services, technology, and life sciences. Though the U.S. President Donald Trump has outlined that there is an unfair trade imbalance with China, Burn does not perceive its trade imbalance with China as a big issue. In addition, he highlighted that the imbalance will move toward balance over the period of time. Moreover, the British exports have been increasing more rapidly than imports from China in the U.K.
Chinese leaders have signaled that there will be more deals in the future to consolidate financial system and economy of the country. Regulators outlined that there will be less restrictions on foreign ownership of banks and brokerages. However, the U.K. has been seeking details about their trade relationship once the exit takes place. The stock-link plans of London and Shanghai equity markets are underway, but they have a long way to go. The visit of British PM may be the beginning of the golden era of relationship between two countries. But it seems China is in no hurry as it awaits to find out how the exit takes place and make further decisions on their ties accordingly.