UK Chancellor Rachel Reeves will visit China this weekend to discuss trade and investment opportunities with her Chinese counterpart Vice Premier He Lifeng. Reeves will work towards the UK’s main goal of growing the economy to raise living standards. However, the visit has been criticised due to recent market issues in the UK and the Chancellor’s self-imposed fiscal rules. Reeves has pledged not to borrow to fund day-to-day spending and to get debt falling as a share of national income by the end of this parliament.
Government borrowing costs have been rising in recent months and the cost of borrowing over 10 years hit the highest level since 2008, which could cause issues for Reeves ahead of meeting her fiscal targets. The UK economy has seen little to no growth recently and businesses are anticipating tax rises to come in April. Despite the economic uncertainties, the Chancellor’s visit delivers on a commitment made last year to explore deeper economic co-operation between the UK and China.
The visit will tackle difficult issues in China, including raising concerns about people’s rights and freedoms in Hong Kong as well as urging China to stop its “material and economic support” for Russia’s war against Ukraine. Reeves has said that by finding common ground on trade and investment while being candid about differences and upholding national security as a priority, the UK and China can build a long-term economic relationship that works in the national interest.
China is the world’s second-largest economy and the UK’s fourth-largest single trading partner. In 2020, exports to China supported over 455,000 jobs in the UK. Reeves will be joined in Beijing by Bank of England Governor Andrew Bailey, CEO of the Financial Conduct Authority Nikhil Rathi and senior representatives from some of Britain’s biggest financial services companies. Talks will also focus on expanding current financial services trade in Shanghai and “bringing down barriers” that British businesses face when exporting or expanding to China
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