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British Treasury head Rachel Reeves emphasized London’s potential as a hub for Chinese financial activities during her visit to Beijing, amidst domestic bond market challenges.

Reeves’s trip marks the first high-level British governmental visit to China since former Prime Minister Theresa May’s meeting with President Xi Jinping in 2017, occurring as British government bond yields reached their highest point in 17 years, creating additional challenges for the Labour Party’s economic growth initiatives.

The rising yields are increasing government borrowing costs and debt repayment expenses, potentially necessitating budget cuts or tax increases.

During the reinstatement of bilateral financial discussions, Reeves highlighted London’s role as “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.

The talks resulted in agreements projected to generate £600 million for Britain’s economy over five years. Chinese Vice Premier He Lifeng emphasized that positive bilateral relations depend on mutual respect between the nations.

Despite opposition calls to address domestic financial issues, Reeves proceeded with her scheduled Beijing visit. At Brompton’s Beijing showroom, she reaffirmed her commitment to the October budget’s fiscal guidelines while acknowledging recent market volatility.

The delegation included the Bank of England governor and the UK’s Financial Conduct Authority chief executive. Prime Minister Starmer has been working to balance economic cooperation with China while addressing concerns about human rights and Ukraine.

Starmer’s November meeting with Xi at the G20 summit represented the first British prime ministerial engagement with China since 2018. However, recent allegations about Chinese espionage involving Prince Andrew have strained relations.

Reeves addressed various points of disagreement, including national security, market access, and industrial policy concerns. She also raised issues regarding Russia’s Ukraine invasion and Hong Kong’s situation.

He responded by reiterating China’s neutral stance on Ukraine and suggested Hong Kong could serve as a diplomatic bridge between the nations.

The relationship between Britain and China deteriorated significantly in 2020 following Beijing’s implementation of Hong Kong’s national security law, which restricted freedoms in the former British territory. China maintains its support for Russia while declining to condemn the Ukraine invasion, despite Western criticism of Beijing’s stance.