UK and China restart economic dialogue after years of strained relations

China and Britain restarted economic and financial talks on Saturday after a six-year hiatus during a visit by Britain's Treasury chief to Beijing, as the UK’s Labour government seeks to reset strained ties with the world's second-largest economy.

Rachel Reeves travelled to Beijing accompanied by a delegation of British business leaders and finance officials. She met with Chinese leaders including Vice Premier He Lifeng and Vice President Han Zheng.

The two sides revived the China-UK Economic and Financial Dialogue — annual bilateral talks that have been suspended since 2019 due to the Covid-19 pandemic and deteriorating relations. London hopes renewed dialogues will help bring down barriers that UK businesses face when looking to export or expand to China.

“Today marks a significant milestone in the UK-China relationship with the first Economic and Financial Dialogue between our countries for nearly six years,” Reeves said. She said the meeting signalled the new UK government’s “commitment to fostering a stable, long-term partnership” with China and desire to boost economic cooperation.

Britain wants to improve exchanges in areas such as sustainable finance, capital markets connectivity, pensions and regulatory alignment, as well as trade and investment, Reeves added.

“As part of this, it is important to prevent economic links [from] weakening our national security and economic resilience,” she said.

Vice Premier He said China and Britain should improve cooperation in trade and investment, clean energy, financial services, the green economy, biomedicine, artificial intelligence and other fields.

“We are willing to work with the UK to create a fair, just and non-discriminatory business environment and provide good conditions for the other side’s companies to invest and operate in each other’s countries,” he said.

Addressing concerns

The Sino-British ties have soured following a series of spying allegations from both sides, China’s support for Russia in the Ukraine war and a crackdown on civil liberties in Hong Kong, a former British colony.

British officials said Reeves will also urge Beijing to stop its material and economic support for the Russian war effort in Ukraine and raise the issue of rights and freedoms in Hong Kong.

The delegation included Bank of England Governor Andrew Bailey and the CEOs of the UK Financial Conduct Authority and the London Stock Exchange Group.

Senior executives from some of Britain’s biggest financial services firms, including the group chairs of HSBC and Standard Chartered, were also included.

Reeves’ visit comes after Foreign Secretary David Lammy travelled to China in October and Prime Minister Keir Starmer met with Chinese President Xi Jinping on the sidelines of the G20 summit in Brazil in November.

It’s all part of a bid by Starmer, elected as leader in July, to strengthen political and economic ties with China, the UK’s fourth-largest single trading partner, according to the Treasury.