Enhancing Britain’s economic status will be “paramount in the chancellor’s thoughts” during her visit to China, as stated by the Treasury amidst ongoing debate surrounding the journey.
Rachel Reeves departed on Friday, dismissing requests from opposition parties to cancel the well-planned excursion due to domestic market instability.
The previous week has witnessed a decline in the pound and a rise in government borrowing expenses, sparking speculation about potential cuts in spending or increases in taxes.
The Conservative Party has charged the chancellor with having “escaped to China” instead of addressing how she intends to remedy the stagnant UK economy, while the Liberal Democrats argue that she should remain in Britain to unveil a “plan B” aimed at navigating market fluctuations.
Nonetheless, Ms. Reeves has rebuffed the suggestion to cancel her visit, asserting in The Times on Friday evening that opting not to interact with China constitutes “no choice at all.”
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The chancellor will be joined by Bank of England governor Andrew Bailey and additional high-ranking officials.
She is scheduled to meet with her Chinese counterpart, Vice Premier He Lifeng, in Beijing on Saturday to deliberate on financial services, trade, and investments.
Additionally, she plans to “address challenging topics,” including Chinese companies that are supporting Russia’s aggression in Ukraine as well as issues relating to rights and freedoms in Hong Kong, according to the Treasury.
However, it did not specify if Ms. Reeves would address the treatment of the Uyghur community, a matter that Downing Street indicated Foreign Secretary David Lammy would discuss during his visit last year.
Britain’s Foreign Secretary David Lammy and Chinese Foreign Minister Wang Yi in Beijing. Pic: AP
On Friday, Culture Secretary Lisa Nandy supported the trip, stating to Sky News that the rising costs associated with government borrowing are part of a “global trend” impacting numerous countries, “most prominently the United States.”
“According to the OECD [Organisation for Economic Co-operation and Development], we remain on course to be the fastest growing economy in Europe,” she told Anna Jones on Sky News Breakfast.
“China is the world’s second-largest economy, and its actions significantly influence the lives of individuals from Stockton to Sunderland, all across the UK, making it essential for us to cultivate a relationship with them.”
Read more – Ed Conway analysis: The chancellor’s gamble with China
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Nandy defends Reeves’ excursion to China
Nevertheless, former Prime Minister Boris Johnson remarked that Ms. Reeves had “been caught” and suggested that she should “head to HR and retrieve her P45 – or remain in China.”
During her stay in the nation’s capital, Ms. Reeves is also scheduled to visit the flagship store of the British bicycle brand Brompton, which significantly depends on exports to China, prior to traveling to Shanghai for discussions with representatives from both British and Chinese enterprises.
This marks the inaugural UK-China Economic and Financial Dialogue (EFD) since 2019, building upon the Labour government’s agenda for a “pragmatic” approach with the globe’s second-largest economy.
Sir Keir Starmer was the first British Prime Minister in six years to meet with China’s President Xi Jinping at the G20 summit in Brazil last autumn.
Over the past decade, relations between the UK and China have soured as the Conservative government criticized human rights violations, raising concerns regarding national security risks.
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What is the extent of our trade with China?
Managing this has proven to be challenging, considering that China stands as the UK’s fourth largest individual trading partner, with a trade alliance valued at nearly £113 billion and exports to China accounting for over 455,000 jobs in the UK in 2020, based on government statistics.
Throughout the Conservative Party’s 14 years in governance, the strategy has fluctuated greatly from the “golden era” during David Cameron’s tenure to aggressive posturing under Liz Truss, while Rishi Sunak promised to adopt a “robust” stance yet resisted demands from his own party to label China as a threat.
The Treasury indicated that a stable rapport with China would bolster economic expansion and that “ensuring the security and prosperity of working individuals across Britain is paramount in the chancellor’s considerations.”
Prior to her journey, Ms. Reeves stated: “By discovering common ground in trade and investment, while being straightforward about our disagreements and keeping national security as the primary responsibility of this government, we can cultivate a long-term economic partnership with China that aligns with our national interests.”
