Farm Ireland

Sunday 21 October 2018

Why Britain is cosying up to China: Beef and free-trade

Warned: Theresa May. REUTERS/Nicolas Asfonri/Pool
Warned: Theresa May. REUTERS/Nicolas Asfonri/Pool
Prime Minister Theresa May’s government faces trade talks. Photo: PA

Neil Connor

Theresa May arrives in China for a three-day visit on Wednesday where she is hoping to "intensify" the Golden Era of relations between the two countries.

The Prime Minister has promised "frank discussions" during the talks, but she is seeking concessions on a range of issues.

British exports to China have increased by 60pc since 2010 and totaling some $18bn in 2016 - or 4.4pc of total UK exports.

But there is a growing appetite in the UK for more access to a range of sectors, including agriculture and pharmaceuticals.

The largest ever business delegation - more than 50 business leaders - will join Mrs May on the trip, including chief executives of major exporters such as Jaguar Land Rover, AstraZeneca and BP.

"There are huge trade opportunities in China that we want to help British businesses take advantage of," said Mrs May, ahead of her trip.

"That is why I'm taking a large multi-sector business delegation with me, representing all corners of the UK and sectors in which the UK excels."

British officials will hope the visit results in a deepening of ties relating to the financial sector.

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Chancellor Phillip Hammond said in December that the two countries will speed up a London-Shanghai stock connect program, as well as a possible scheme to connect their bond markets.

British food producers are also hoping to gain more access to the Chinese market.

French President Emmanuel Macron negotiated an end to a Chinese embargo on French beef when he visited China earlier this month.

A similar agreement for Britain could also help pave the way for British exports of lamb, poultry and fish.

Beijing started closing off its markets to all European and later US beef imports in the wake of the "mad cow" disease scare.

China's ambassador to the UK, Liu Xiaoming, wrote in The Telegraph that Mrs May's visit - being made amid "critical" Brexit negotiations -  "offers the opportunity to shift the China-UK 'Golden Era' into a higher gear and upgrade bilateral relations".

The goal for the UK after leaving the European Union is to establish a free trade agreement with China, along with other major world economies.

Officials will not be negotiating plans to set up an FTA plans during the visit.

However, the UK side will be hoping that by gradually opening up different Chinese sectors to British businesses, signing a free trade agreement with the world's second biggest economy when the UK has left the EU would be a far simpler process.

Trade Secretary Liam Fox, who is also joining the trip, is keen to focus on the potential opportunity provided by the Chinese market.

"Our relationship is now more important than ever, as we look to form new trading bonds with the biggest-growing markets around the world," he said.

"Indeed, China's middle class is expected to number 600 million by 2020 - greater than the current entire population of the EU - presenting unrivalled opportunities for UK business."

Wang Yiwei, a professor at the School of International Studies of Renmin University in Beijing, said China would be open to signing a free trade agreement with the UK, as long it benefitted Beijing.

"A free trade agreement is definitely a possibly, if it boosted economic advantages between China and UK," he said.

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