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Looking at the brighter side of UK leaving EU

By Harvey Morris | China Daily | Updated: 2017-04-01 08:51

Looking at the brighter side of UK leaving EU

Protesters hold banners while standing outside the House of Commons in central London on Wednesday.[Photo/Agencies]

Theresa May, the British prime minister, gave formal notice to the European Union of the country's intention to leave the bloc on Wednesday, nine months after the outcome of a referendum that surprised and disheartened many of the United Kingdom's international partners.

The narrow victory for the "Brexit" camp dismayed not just Britain's 27 partners in the EU but also important trading partners further afield, including China. Concerns over the consequences of the referendum dented confidence in markets worldwide, including a temporary downward 1 percent blip in Chinese shares.

Just ahead of the referendum, the Global Times, a Beijing-based newspaper, had pointed out that London was an important hub for the internationalization of the renminbi and that a Brexit would cast a shadow over China-EU trade ties.

Progress toward closer China-UK ties, highlighted by the state visit to Britain of President Xi Jinping in 2015, was at least in part driven by Britain's role as a key member of the EU and by London's status as a gateway to markets in the rest of Europe.

As the May government embarks on negotiations to define the future relationship with the EU, many of Britain's trading partners have decided to adopt a "glass half full" stance that highlights the potential benefits of its departure from the bloc.

Among the experts prepared to lend a note of optimism to Britain's future prospects is Li Ruogu, former chairman of the Export-Import Bank of China, who recently said at the Boao Forum for Asia in Hainan province that Brexit would pave a new path for free trade between China and the UK.

"After Brexit, China and UK trade may get freer, especially in financial services," Li said, adding that, although the UK is not a big country with a large population, it maintains an advantage in areas such as financial services.

Britain's trading partners outside the EU would probably still prefer to see a "soft" Brexit, which would preserve its gateway status to Europe's goods and financial markets.

However, there is recognition that post-Brexit Britain would fully embrace free trade in contrast to the growth of protectionism elsewhere. Even while within the EU, Britain has resisted the imposition of punitive measures against Chinese steel exports.

In theory, British and Chinese trade negotiators could use a close bilateral relationship to their advantage to win concessions from the EU. In practice, the continuing strength of Chinese investment in the UK indicates China is not about to abandon a post-Brexit Britain.

As the UK embarks on two years of tough bargaining with the EU on the terms of its departure, leading pro-Brexit voices are lauding the benefits of the UK going it alone.

British industrialist James Dyson, a prominent "leaver", recently said he was "enormously optimistic" about future UK trade with the rest of the world, particularly Asia. His comments came after his company, famous for its innovative vacuum cleaners, announced profits of £631 million ($792 million) last year, driven in part by 244 percent growth in sales to China.

Dyson's profits are a useful example for the Brexit camp to show that Britain can thrive once it has left the EU by strengthening its ties with markets beyond Europe.

Elsewhere, pro-Brexiters are scratching around slightly more desperately for good news to justify the decision to distance the country from its biggest market.

A member of the UK Parliament said recently that Brexit would provide an opportunity for British farmers to increase sales of chicken feet to China, because they are considered a delicacy in that country.

The writer is a senior media consultant for China Daily UK.

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