UK treasurer says London ‘natural home’ for Chinese finance

AFP | Beijing, China
Email : editor@newsofbahrain.com

British Treasurer Rachel Reeves said on Saturday that London is a "natural home" for Chinese finance during a visit to Beijing amid bond market turmoil in the UK.

Reeves, who holds the formal title of Chancellor of the Exchequer, is the highest-ranking British government official to visit China since then-Prime Minister Theresa May held talks with President Xi Jinping seven years ago.

The trip comes as the yield on British government bonds reached a 17-year high this week, further complicating the ruling Labour Party's efforts to revive growth. The increase in bond yields makes it more costly for the government to finance current operations and repay debt, raising the risk of spending cuts or tax hikes.

Speaking at the reopening of long-suspended finance talks between the two countries, Reeves emphasized that London was a "natural home for China's financial services firms and their clients raising capital, and a launchpad for Chinese firms seeking to build a global footprint."

Despite pressure from the parliamentary opposition to stay home and address the financial crisis, a spokesperson for Prime Minister Keir Starmer confirmed that Reeves had not planned to cancel her "long-standing" trip.

Reeves also highlighted "opportunities to deepen connections" on capital markets, stating that both countries need to collaborate more closely on "regulatory cooperation."

At a later press briefing, Reeves said that "common ground" had been found on financial services, trade, investment, climate change, and other areas. She added that the total value of agreements made would be worth £600 million ($732 million) to the British economy over the next five years, without providing specific details.

Her Chinese counterpart, Vice Premier He Lifeng, stated that "experience shows that as long as China and the UK respect each other, relations between our two countries can develop."

During her visit to British bicycle-maker Brompton's Beijing showroom earlier on Saturday, Reeves acknowledged recent moves in global financial markets but reiterated that the fiscal rules 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, adding that her visit would "unlock tangible benefits for British businesses."