Could Brexit Mean Closer Relationships With China?
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In the wake of the European referendum result, the news has been a tad doom and gloom. With the pound sterling falling to a 31-year low against the dollar and political turmoil ensuing at home, it’s easy to overlook the positives.
Trade has always been central to the European Project and remain campaigners made a point of warning us that leaving the union would sever our trading relationship with Europe and leave us a lone, isolated state on the fringes of Europe. Exactly what our trading relationship with the world’s biggest single market will look like remains to be seen, but one thing we can be certain of is that leaving the EU will open up a wealth of new trading opportunities with the rest of the world.
In fact, it is already beginning to materialise. Chinese officials have said that the “situation in Western Europe will push China and the UK to make a trade treaty”. In recent years, Anglo-Chinese relationships have come a long way – remembering that China and Britain were on opposite sides during the Cold War – with the Chinese President, Xi Jinping, making a state visit to Britain in October and initiatives such as the ‘UK-China Year of Cultural Exchange’ run by the British Council last year. Historically, the European Union has had a patchy relationship with China. Since 1989, the EU has maintained an arms embargo on China – meaning that British and European military hardware can’t be exported to China. Therefore, British defence companies like BAE systems find themselves cut off from the second biggest economy in the world. Furthermore, the European Union and China haven’t managed to negotiate a free trade agreement, although both parties benefit from a substantial amount of trade between each other.
And China isn’t the only country that has expressed an interest in forming a new trading relationship with the UK. In the past couple of weeks, India has said “With Britain’s departure from the EU, India will have to negotiate a Free Trade Agreement with the UK” and Commonwealth countries such as Canada, Australia and New Zealand all provide opportunities for Britain to trade with its the 53 member states, which are all united by cultural and democratic values but, crucially, aren’t entangled by political obligations to one another. Broadly speaking, the Commonwealth is a much more informal version of the European Union.
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