Britain’s Prime Minister Theresa May has recently been in China to forge new trade partnerships for the time after Brexit. May hopes to secure a free trade agreement before leaving the European Union in 2019.
The UK sends 3.1 percent of its exports to China, while just seven percent of its imports are from China, according to the Office for National Statistics.
Doing business with the UK post-Brexit will not be easy for China, according to Jianwei Xu, a senior economist for China Natixis.
“It’s not going to be as easy as people may think because after Brexit, the UK will have to go through a lot of procedures to sign any contracts, to sign any trade deals with a third country. First, it needs to settle its Brexit deal … before that, it cannot even discuss multilateral tariff schemes.”
Thus any UK-China deal could take years to bare fruit.
“For China, if the UK doesn’t settle its Brexit deal with the European Union, it doesn’t want to involve itself
too early in [trade] negotiations,” says Xu. The wait-and-see approach is currently the card China is playing.
“The golden era between the UK and China was established while the UK was still part of the European Union,” says Xu who explains that the UK was China’s gateway into the EU. Without that access, “the attraction made from the UK is less so for China at the moment. So that’s basically the general framework China faces when they negotiate with the UK – it’s less attractive at the moment.”