China (Parliament Politics Magazine) – Chancellor Rachel Reeves arrived in Beijing, arguing for stronger relations with China to enhance British businesses despite market challenges and criticism.

Despite UK financial pressures, Chancellor Reeves defends her decision to visit China to strengthen the economy, becoming the first Chancellor to do so in ten years.

She aims for sustained collaboration with the world’s largest economy, China, to drive growth that benefits the working class in all parts of the UK.

Ms Rachel stands firm on her economic policies during her visit to Brompton’s Beijing store. 

Reeves meets Chinese vice-premier

In Beijing, Reeves discussed strategies for boosting the British economy and enhancing living conditions with Chinese Vice-Premier He Lifeng, focusing on trade and funding.

According to the Treasury, China is the world’s second-largest economy and the UK’s fourth-largest trading partner. In 2020, exports to China supported over 455,000 UK jobs. 

Ms. Rachel said,

“Growth is the number one mission of this government.”

She added,

“The fiscal rules laid out in the Budget are non-negotiable. Economic stability is the bedrock for economic growth and prosperity.”

The Chancellor stated that her visit to China aligns with Prime Minister Sir Keir Starmer’s and President Xi’s promise to enhance economic relations, which they made last year. 

As per official sources, Ms Rachel is expected to bring up sensitive issues with China’s vice-premier, including calls to end its economic support for Russia’s war in Ukraine and to discuss human rights violations in Hong Kong.

Market pressures challenge Reeves’ fiscal plans

Market fluctuations can hinder Ms Rachel’s efforts to uphold her self-imposed fiscal targets. Before this parliament, she pledged to refrain from borrowing for daily spending and lowered her debt relative to national income. 

To cover the gap between spending and tax income, governments typically borrow by issuing bonds to investors.

UK borrowing costs have increased recently, with 10-year rates hitting their highest level since 2008. On Friday, the pound fell below $1.22.

As the UK market fluctuates, economic growth remains stagnant, and companies prepare for tax hikes coming in April.

Labour MPs urge Reeves to demand Jimmy Lai’s release

During her historic diplomatic tour to China, Labour MPs have called Ms Reeves for the release of Jimmy Lai, the pro-democracy media mogul.

As reported by The Guardian, in a cross-party move, around nine Labour MPs have appealed to the Chancellor to raise the issue of political prisoners’ detention and seek Lai’s ‘immediate and unconditional release’ during her two-day visit to China. 

A government official revealed that Rachel Reeves will bring up Lai’s case, with the Treasury highlighting that she would also address Hong Kong’s treatment of pro-democracy activists and China’s support for Russia in Ukraine.

Opposition urges Reeves to scrap China trip

Amid the pound’s sharp decline this Thursday, both the Conservatives and Liberal Democrats called for Reeves to postpone her China visit. 

Ministers defend her China visit

Ministers, on the other hand, argue that deepening ties with China will enhance economic growth. They point to the UK’s past failure to match the US and EU’s level of engagement with Beijing under the Tories. Lisa Nandy, the Culture Secretary, has supported the Chancellor’s decision to ignore the Conservatives’ calls to cancel the trip, insisting she was “absolutely right” to move forward.

Labour backs China engagement, critics disagree

According to a senior business source, Labour has acknowledged the UK’s dependence on foreign trade and investment and the need for a sensible approach to China. The source highlighted that Reeves will be a prominent figure in rebuilding the UK’s ties with China, in line with the approach of other Western nations. 

Charles Parton, a former diplomat who spent more than two decades in China and Hong Kong, claimed that ministers were overlooking the economic impact of the UK’s political ties with Beijing. 

He stated,

“2022 and 2023 were record years for exports to China, and those are the years where Labour says the Conservatives messed up the China policy by being too hostile.”

In Beijing, Ms. Reeves is ready to be joined by Bank of England Governor Andrew Bailey, Financial Conduct Authority CEO Nikhil Rathi, and top officials from some of Britain’s prominent financial companies.