British Chancellor of the Exchequer Rachel Reeves yesterday said that London was a “natural home” for Chinese finance, as she began a visit to Beijing in the shadow of bond market turmoil back home.
Reeves is the most senior British government official to visit China since then-British prime minister Theresa May held talks with Chinese President Xi Jinping (習近平) seven years ago.
The trip comes as the yield on British government bonds reached a 17-year high this week, further complicating the ruling party’s sputtering efforts to revitalize growth.
Photo: AP
The increase makes it more costly for the government to finance current operations and repay debt, raising risks it would have to make spending cuts or hike taxes.
Speaking at the reopening of long-suspended finance talks between the two countries, Reeves said London was a “natural home for China’s financial services firms and your clients raising capital, and a launchpad for Chinese firms seeking to build a global footprint.”
“Across capital markets, we have opportunities to deepen connections between the UK and China,” she said as she met her Chinese counterpart, Chinese Vice Premier He Lifeng (何立峰), at Beijing’s opulent Diaoyutai State Guesthouse.
“However, as we continue to strengthen our financial relationship, it is crucial that we work together even closer on regulatory cooperation,” Reeves said.
In his welcome remarks, He said Beijing hoped the forum would help to develop the internationalization of the Chinese yuan, deepen links between the two countries’ capital markets, and strengthen cooperation in green finance and other areas.
Reeves faced pressure from parliamentary opposition to stay home and address the financial crisis, but a spokesperson for British Prime Minister Keir Starmer this week said Reeves had not planned to cancel her “long-standing” trip.
Earlier Saturday, Reeves acknowledged “moves in global financial markets over the last few days,” but said the fiscal rules she set out in her October budget were “non-negotiable.”
“Growth is the number one mission of this government, to make our country better off,” she said at British bicycle-maker Brompton’s Beijing showroom. “That’s why I’m in China, to unlock tangible benefits for British businesses exporting and trading around the world.”
Reeves and He yesterday presided over the reopening of the delayed UK-China financial services talks.
China’s Ministry of Foreign Affairs on Friday said the two sides would “open discussions on macroeconomic policy and economic globalization, trade and investment, industrial cooperation, financial market development and cooperation on financial regulation.”
“China and the UK strengthening economic and financial cooperation accords with the two countries’ interests... and will add certainty and inject new momentum into the development of the global economy,” ministry spokesman Guo Jiakun (郭嘉昆) said.
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