British Finance Minister Rachel Reeves has emphasized the importance of fostering ‘pragmatic and predictable’ relations with China to stimulate economic growth and trade during her two-day visit to the country. This represents the restoration of high-level economic and financial discussions between the two nations, which have been stalled for nearly six years.
Reeves defended her fiscal strategy amidst rising British interest rates, which have increased government borrowing costs. Speaking at a Brompton bicycle shop in Beijing, she stated, “The fiscal rules that I set out in my budget in October are non-negotiable, and growth is the number one mission of this government to make our country better off.”
Highlighting the importance of economic collaboration, Reeves added, “That’s why I’m in China — to unlock tangible benefits for British businesses exporting and trading around the world and to ensure we have greater access to the second-largest economy in the world.”
The visit comes against the backdrop of rising borrowing costs due to a global bond selloff, drawing comparisons to the 2022 ‘mini-budget’ crisis that led to then-Prime Minister Liz Truss stepping down. Recent market movements have been less volatile, with no indications of the institutional strain that triggered the Bank of England’s emergency bond purchases in 2022.
When questioned about potential tariffs on Chinese electric vehicles, in line with actions by Washington and Brussels, Reeves stated, “We keep issues under review, but we make decisions in our national interest.” She also highlighted the contribution of British car manufacturers like Jaguar Land Rover, which exports extensively to China, and expressed a commitment to supporting their growth.
During her visit, Reeves met Vice President Han Zheng, emphasizing the value of “open and frank dialogue in areas where we agree, but also in areas where we have different views.” This interaction follows a dialogue between Prime Minister Keir Starmer and President Xi Jinping last year, marking the first high-level engagement between the UK and China since 2018.
Reeves will continue her efforts to strengthen economic ties during her visit to Shanghai on Sunday, further underlining the UK’s commitment to fostering constructive relations with China.
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