British treasurer Rachel Reeves said Saturday that London was a “natural home” for Chinese finance as she began a visit to Beijing in the shadow of bond market turmoil back home.
Reeves, whose formal title is chancellor of the exchequer, is the most senior British government official to visit China since then-prime minister Theresa May held talks with President Xi Jinping seven years ago.
The trip comes as the yield on British government bonds reached a 17-year high this week, further complicating the ruling Labour Party’s sputtering efforts to revitalise growth.
The increase makes it more costly for the government to finance current operations and repay debt, raising risks it will have to make spending cuts or hike taxes.
Speaking at the reopening of long-suspended finance talks between the two countries, Reeves said London was a “natural home for China’s financial services firms and your clients raising capital, and a launchpad for Chinese firms seeking to build a global footprint”.
“Across capital markets, we have opportunities to deepen connections between the UK and China,” she said as she met her Chinese counterpart He Lifeng at Beijing’s opulent Diaoyutai State Guesthouse.
“However, as we continue to strengthen our financial relationship, it is crucial that we work together even closer on regulatory cooperation,” Reeves said.
In his welcome remarks, He said Beijing hoped the forum would help to develop the internationalisation of the Chinese yuan, deepen links between the two countries’ capital markets and strengthen cooperation in green finance and other areas.
Reeves faced pressure from the parliamentary opposition to stay home and address the financial crisis, but a spokesperson for Prime Minister Keir Starmer said this week she had not planned to cancel her “long-standing” trip.
Earlier Saturday, Reeves acknowledged “moves in global financial markets over the last few days”, but said the fiscal rules she set out in her October budget were “non-negotiable”.
“Growth is the number one mission of this government, to make our country better off,” she said at British bicycle-maker Brompton’s Beijing showroom.
“That’s why I’m in China, to unlock tangible benefits for British businesses exporting and trading around the world,” she said.
Reeves and He on Saturday presided over the re-opening of the delayed China-UK financial services talks.
China’s foreign ministry said Friday the two sides would “open discussions on macroeconomic policy and economic globalisation, trade and investment, industrial cooperation, financial market development and cooperation on financial regulation”.
