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What will Brexit mean for China? (Jiang Shixue)

What will Brexit mean for China? (Jiang Shixue)

Author:Jiang Shixue From:www.china.org.cn Update:2017-03-21 14:56:16

On March 14, Britain's Parliament passed the Brexit bill, allowing Prime Minister Theresa May to start negotiations for the U.K.'s exit from the European Union (EU). These are likely to begin in the last week of March.

With people in various countries wondering what the impact of this move will be, Chinese also need to ponder this question.

Soon after the majority "yes" vote was announced in the Brexit referendum in June 2016, the Chinese Foreign Ministry spokesperson expressed the following position: First of all, China respects the choice of the British people; second, China has always looked at the China-U.K. and China-EU ties from a strategic height; and third, China would be happy to see an early conclusion of the negotiation process as a prosperous and stable Europe is in everyone's interest.

Politically, Brexit might strengthen the bilateral relationship between the U.K. and China. Having parted company with the EU after a fairly long "marriage", the British need to strengthen ties with others, including China, an emerging power moving towards the global center.

In early February 2017, commenting on the news Prime Minister May would visit China this year, the Foreign Ministry spokesperson said: "China will follow the developments of the Brexit negotiations closely, and hopes that the two sides will reach a win-win conclusion."

As a matter of fact, Mrs. May is the first European leader to announce an intention to attend the Belt and Road forum in Beijing this May, showing that her government attaches importance to the "global comprehensive strategic partnership in the 21st century" between the two countries.

This partnership was established when Chinese President Xi Jinping visited London in October 2015. To date, China has set up different types of partnership with more than 70 countries, but the one with the U.K. alone uses such words as "global" and "21st century."

Needless to say, no matter when Brexit becomes reality, the special partnership between China and the U.K. must be nurtured with great care. It should not be forgotten that high level exchanges of visits between the two sides were frozen for one-and-a-half years when David Cameron, then leading the country, received the Dalai Lama in May 2012.

Bilateral ties were not normalized until Chinese Foreign Minister Wang Yi and British Foreign Secretary William Hague held a telephone conversation in June 2013. On that occasion, Hague said the U.K. "respects the sovereignty and territorial integrity of China and recognizes Tibet as part of China. Britain does not support 'Tibetan independence'." He also acknowledged that "Britain has been fully aware of the sensitivity of Tibet-related issues and is willing to properly handle China's concerns." Cameron then visited Beijing in December 2013.

Hong Kong is another issue where the U.K. should show respect for China's sovereignty. It is certain that, after Brexit, the U.K. may continue to have close relations with its former colony. However, it must avoid any action that would damage China-U.K. relations or the "one country, two systems" policy applied successfully in Hong Kong since 1997.

Economically speaking, the impact of Brexit may be mixed. On the positive side, it is likely that economic relations between China and the U.K. will be intensified. No matter whether it involves a soft or hard "divorce," the U.K. will surely try very hard to consolidate or even expand its position in the Chinese market.

According to the EU Lisbon Treaty, no member is allowed to sign a free trade agreement (FTA) with any third party bilaterally, as the EU has sole competence in this regard. After quitting the EU, it's possible that the U.K. can negotiate such an FTA with China, making it China's largest trade partner with a FTA. So far, China has concluded 14 FTAs with 22 countries, none as big as the U.K.

Brexit might mean a weak pound, and that's good news for Chinese tourists and parents who send their offspring to study in British universities.

However, Brexit might generate some unwelcome repercussions. First of all, it might tarnish the investment environment, discouraging for Chinese companies. Second, the U.K.'s position as an international financial center might be affected, and this could lessen Chinese desire to push forward internationalization of its currency. Other places like Frankfurt and Paris could overtake London in financial cooperation.

Beijing always says a strong and united Europe is good for China as well as for the world. Therefore, indirectly, the impact of Brexit on China is not a blessing. It is believed that Brexit will downplay the EU's position on the world stage, a counter-productive outcome for the emerging multilateral world order. Hopefully, European integration process will continue to proceed although Eurosceptics are on the rise over there.

http://www.china.org.cn/opinion/2017-03/20/content_40477074.htm

(Contant Jiang Shixue:jiangsx@cass.org.cn

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