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Brexit can bring China and UK More Closer But Uncertainty Still Remains: UK Government Officials

Updated:2018-11-28 10:45:22    Source:www.tannet-group.comViews:338

If Britain leaves the European Union (EU) on March 29, 2019 it will be able to negotiate trade agreements - though they will only come into force when it leaves the EU's customs union. A free trade deal with China is high on the agenda, according to UK government officials.

According to statistics from a briefing paper compiled by the UK's House of Commons Library, the UK's trade deficit with China was 22.9 billion pounds in 2017. However, it does enjoy a surplus of 2.6 billion pounds on trade in services with China.

Last year, the country exported 4.3 billion pounds of services to China, among which travel services were the most popular export.

Rosy as the picture might appear for China to benefit more from UK's services industry in the post-Brexit era, uncertainty looms as the future UK-EU trade relations are yet to be outlined in law.

A roadmap for future ties, signed off by the UK government and EU leaders but not by their respective parliaments, is vague and does not bind either party.

The key for me about Brexit is what happens to Chinese companies trying to do business with Europe and the UK, where previously they may have had one headquarters… now they will have to face the fact that looking at the agreement that is going in play for the future relations between the UK and the EU, it's (the agreement is) very vague. It just says they will attempt to maintain free trade for goods and services, but recognize that there will be restrictions. And that doesn't tell you anything. And the UK's withdrawal will further complicate the issue.

At the moment, all of the major international banks in the world use London as their financial hub for the European zone. But with the UK withdrawing from the EU, countries like France would view the UK as a competitor and try to limit the access of its services into their markets.

The problem it could cause for Chinese banks needing to deal with a customer in Europe is that they may have to communicate in languages that they are not familiar with.

In terms of the internationalization of the RMB, neither expert believes Brexit will impact the process directly.

During a regular press briefing on Monday, Chinese Foreign Ministry spokesperson Geng Shuang emphasized that China expects the UK and the EU to finally reach a consensus on Brexit.

A consensus, and a consensus on a clearer EU-UK trade relationship, is key to addressing the uncertainty that exists for Britain, the EU and China. (Source: CGTN)

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