UK bets big on China, India post Brexit

The Dollar Business Bureau

UK continues to play its cards alright post-Brexit, with Chancellor Philip Hammond describing the UK's present relationship with China as "more important than ever" and British Prime Minister Theresa May calling India as one of the closest friends of the UK.

Promising a "golden era" of relations between the UK and China, Hammond announced several deals including a £200 million construction contract by the Chinese contractor CITIC Construction in the first phase of the £1.7bn London Royal Albert Docks project, headed by the Chinese developer ABP.

China’s vice-premier Ma Kai and Hammond held a meeting in London's Lancaster House, in which it was agreed upon that the UK, will invest up to £40m in the Asian Infrastructure Investment Bank based in Beijing, as a fund to help developing countries prepare infrastructure programmes.

Vice-Premier Ma Kai said he wanted to see the UK and EU reach a "win-win" deal over Brexit.

Formal talks on the UK's departure from the European Union are due to start next year.

Hammond underscored that it was important for the UK to tap into the Chinese market, where the middle class population is expected to reach 600 million in the next few years.

"Our trade relationship with China is now more important than ever," Hammond said.

Mr Ma said: "China wishes to see a UK and Europe that encourage stability and high prosperity. China will be happy to see the UK and Europe reach a win-win relationship through negotiation."

The UK envisages to strengthen its trade relations with India and China, two of the fastest growing large economies of the world, especially keeping in mind the election of the next US President Donald Trump, who, in his several speeches and foreign policy announcements, said he would renegotiate BAFTA, discontinue with the TPP and apply 45% tariff barriers to Chinese imports. 

"President Trump has just been elected by the American people. He will want to consult with his advisers, talk to officials and I'm sure we will have a very constructive dialogue, as we do with the Chinese, with the new American administration," Hammond said.

"It's about getting the right balance in the global trading system, so that we can have the benefits of open markets, while being properly and appropriately protected," he added.

Following his meeting in London, Hammond said the deal would attract £6 billion of investment to the UK and Ma said the deal would further the UK-China trade ties.