China and the U.K. restarted economic and financial talks on Saturday following a six-year hiatus during a high-level visit by Britain’s Treasury chief to Beijing, as the Labour government seeks to reset strained ties with the world’s second-largest economy.
Accompanied by a delegation of British business executives and finance officials, Chancellor Rachel Reeves met with Chinese leaders, including Vice Premier He Lifeng and Vice President Han Zheng.
Reeves emphasized the need for a "stable, pragmatic" U.K.-China relationship as she wrapped up talks in Beijing.
"Our two countries can work together on areas of mutual interest in the interests of our citizens whilst also being frank and open with each other when we disagree," she said.
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 would 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 two sides inked agreements on Saturday in areas such as finance "worth 600 million pounds ($732 million) over the next five years for the U.K. economy," Reeves said without outlining the specifics of the deals.
"Overall, this government’s re-engagement with China already sets us on course to deliver up to 1 billion pounds of value for the U.K. economy," she said.
Reeves’s three-day trip has been clouded by upheaval in the bond markets, which has pushed borrowing costs to their highest level since the 2008 financial crisis. The opposition Conservative Party has accused her of having "fled to China" rather than addressing ease market concerns about inflation and economic stagnation.
In an op-ed piece in the Times of London, Reeves insisted that China offers Britain an opportunity to bolster growth. The nation cannot ignore that China is its fourth-largest trading partner, with exports supporting close to half a million jobs in the U.K., she said.
"Choosing not to engage with China is, therefore, no choice at all," she wrote.
Reeves’ visit marked the revival of the China-U.K. Economic and Financial Dialogue, annual bilateral talks suspended since 2019 due to the COVID-19 pandemic and deteriorating relations.
London hopes renewed dialogues will help remove barriers that U.K. businesses face when exporting or expanding to China.
Britain seeks to improve exchanges in areas such as sustainable finance, capital markets connectivity, pensions and regulatory alignment and 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.
She said she welcomed China’s plans to issue its first overseas sovereign green bond in London this year.
The meeting also focused on finding ways to lift market access barriers for goods and services, "including unlocking a package in agrifood which is set to boost U.K. trade with China," Reeves added.
Vice Premier He said China and Britain agreed to remove barriers to investment in areas such as clean technology, life sciences, digital technology and financial services.
The delegation included Bank of England Governor Andrew Bailey and, the U.K. Financial Conduct Authority CEOs and the London Stock Exchange Group. Senior executives from some of Britain’s most prominent financial services firms, including the group chairs of HSBC and Standard Chartered, were also included.
Reeves’ visit follows Foreign Secretary David Lammy's trip to China in October and Prime Minister Keir Starmer's meeting with Chinese President Xi Jinping on the sidelines of the G-20 summit in Brazil in November.
It’s all part of a bid by Starmer, elected leader in July, to strengthen political and economic ties with China, the U.K.’s fourth-largest single trading partner, according to the Treasury.
Officials said Starmer wanted a "pragmatic" approach to working with Beijing on global stability, climate change and the transition to clean energy. But some in the opposition Conservative Party have criticized his stance and said trade ties should not come at the expense of national security and human rights concerns.
British political leaders and intelligence chiefs have repeatedly warned that China poses security threats. Calls to tackle the challenge grew louder last month when it emerged that an alleged Chinese spy had cultivated close ties with Prince Andrew and carried out "covert and deceptive activity” for China’s ruling Communist Party, according to officials.
"National security is the foundation of what any government acting in the national interest will prioritize," Reeves said. "But we need to make sure that we have pragmatic and good relations with countries around the world. That is in our national interest."
