02:33 GMT +312 December 2018
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    A member of staff stands behind flags as officials arrive for the UK-China High Level Financial Services Roundtable at the Bank of China head office building in Beijing on July 22, 2016

    China Touts Possible UK Trade Deal, Offers Talks With US

    © AFP 2018 / DAMIR SAGOLJ
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    China's Foreign Ministry is taking a friendly stance towards both the UK and the US, saying Beijing is open to advancing bilateral trade and investment cooperation with either or both of these countries.

    Kristian Rouz — The Chinese government says it is open to negotiations on a free-trade agreement (FTA) with Britain after its separation from the EU in March 2019. Additionally, a top Chinese Foreign Ministry official has urged a trade dialogue with the US. These statements come amidst the heightened trade tensions between Beijing and Washington.

    According to recently-appointed British Foreign Secretary Jeremy Hunt, who is currently on his first overseas tour, mainland China has expressed interest in striking a comprehensive trade deal with the post-Brexit UK. Secretary Hunt stressed the preliminary understanding on bilateral trade could significantly bolster Britain's bargaining power in the ongoing Brexit talks with Brussels.

    READ MORE: China, Canada, EU 'Not Buying' Trump's 'Art of the Deal' Strategy — Economist

    During a joint news conference with Chinese Foreign Minister Wang Yi, Secretary Hunt said Beijing had offered "to open discussions about a possible free trade deal done between Britain and China post-Brexit, and that's something we welcome and we said we will explore."

    This falls in the with the broader trade agenda of the Conservative and Unionist cabinet of Prime Minister Theresa May, who has previously said bilateral trade deals would be the main priority in the immediate aftermath of Brexit.

    Whilst in Beijing, Secretary Hunt also had meetings with Chinese Premier Li Keqiang and top trade officials in the Communist Party of China, Yang Jiechi.

    The British cabinet conveyed a message to their Chinese counterparts the UK is interested in maintaining the momentum of the "golden era" relations between the Britain and China.

    "China and Britain have very different systems but we do have a lot in common, and we in the UK think that the rise of China and China's economy and Chinese power can and must be a positive force in the world," Secretary Hunt said.

    A possible FTA between London and Beijing would also greatly benefit China as well. Following two investigations into Chinese trade practices in the US and subsequent trade restrictions, Beijing is now looking for a new source of technology, as well as new destinations for its exports in manufactured goods.

    While China has been advancing its "Belt and Road" initiative, aimed at securing trade and investment preferences across Asia, along with its "yuan diplomacy", officials in Beijing realize the importance of maintaining good trade relations with advanced economies.

    During the press conference with Secretary Hunt, Wang said the UK and China "agreed to proactively link up each other's development strategies, and expand the scale of trade and mutual investment."

    The sides also reaffirmed their commitment to opposing what they called protectionist policies and trade restrictions. This comes as China has sought support for its agenda of keeping a status-quo in the global trade, which has greatly benefitted the Chinese economy over the past two decades, particularly, after China joined the World Trade Organization (WTO) on its own terms.

    READ MORE: US-China 'Trade Skirmishes' Could Become a Global Trade War — Specialist

    Wang criticized the US for the new trade agenda that is being pursued by the Trump administration. The Chinese Foreign Minister stressed the US' trade imbalances aren't China's fault, and stem from the expensive US dollar, America's large consumer market, low US savings rate and the limits on US high-tech exports.

    "The responsibility for the trade imbalance between China and the United States lies not with China," Wang said.

    He also touted the large volumes of cheap Chinese goods, which Wang believes have benefitted the American consumer over the past two decades, whilst China has imported US grain and energy, and has been open to increasing these trades.

    Yet again, Wang urged the US to continue negotiating instead of advancing the battle of mutual attrition with the restrictions on mutual trade. These comes after US President Donald Trump slapped global tariffs on industrial metals — in line with the Section 232 probe — as well as the restrictions on $50 billion worth of Chinese exports as a result of the Section 301 investigation.

    The White House also pledged to impose tariffs on an additional $450 billion worth of Chinese trade unless Beijing shows what US officials called good faith in its approach to trade.

    But Wang sought to alleviate the tensions.

    "China's door to dialogue and negotiations is always open, but dialogue needs to be based on equality and mutual respect and on rules," the Chinese Foreign Minister said. "Any unilateral threats and pressure will only have the opposite effect."

    Despite the diplomatic progress achieved between the UK and China, British companies and investors are more concerned with the prospect of a free-trade deal with the US, which could provide a massive boost to the UK's exports and domestic investment.

    READ MORE: UK-EU Free Trade May Prompt Mini-TTIP With US, Joining China Silk Road — Journo

    Whilst US President Trump has said such a deal would be off the table if PM May remained in the EU's customs union post-Brexit, officials in Washington also hinted all options on the bilateral trade are still a possibility.

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    Tags:
    trade, Donald Trump, Jeremy Hunt, Theresa May, Wang Yi, United Kingdom, United States, China
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