China and UK plan joint trade, investment review

The United Kingdom is currently conducting a joint trade and investment review with China as both sides are keen to deepen business ties, a senior British trade official said.

The UK's Secretary of State for International Trade Elizabeth Truss has spoken recently with Chinese Minister of Commerce Zhong Shan, and she looks forward to co-chairing a meeting of the UK-China Joint Economic and Trade Commission with him later this year to discuss the trade review, said John Edwards, UK trade commissioner for China.

They will discuss details on how both sides can further improve trade and investment ties, as well as explore all options for enhancing the trade and investment relationship without prejudging outcomes, he said.

The UK's trade volume with China is no longer counted as part of the European Union's total as the former left the alliance at the end of January this year, according to China's Ministry of Commerce.

Edwards said that leaving the EU has given the UK an opportunity to forge a new role for itself in the world, and be a positive and powerful force for free trade.

Eager to put its trade growth on a firmer footing, the UK government has announced a new tariff regime, the UK Global Tariff, or UKGT, on May 19, to replace the EU's Common External Tariff. It will be effective from Jan 1, 2021, after the end of the transition period. It will also be the first time in almost five decades that the UK will have its own tariff policy.

For Chinese exports into the UK, Edwards said the new UKGT will reduce cost pressure through lower tariffs that are levied when they reach the UK as imports.

Globally, the UKGT will almost double the number of products that are tariff-free relative to what is currently applied. Where tariffs have been kept, the UKGT reduces and simplifies tariffs on over 3,500 products. It ensures that 60 percent of trade will come into the UK tariff-free on World Trade Organization terms or through existing preferential access from January 2021.

The UK official said his country will continue to be open to Chinese investment and its companies look forward to increasing their business in China.

"To underscore this, we have seen the approval for Huawei's limited participation in the UK's 5G network over the past several months," he said, adding on nuclear cooperation, there was confirmation that the Hualong One 1000-megawatt class pressurized water reactor, produced by Chinese firms, had passed the next stage of regulatory approval in early May for future deployment in the country.

"China, our third largest trading partner, is crucial as we enter this new chapter," he said, citing the UK's bilateral trade with China reached 104.5 billion pounds ($129.57 billion) in 2019, surpassing 100 billion pounds for the first time and growing more quickly than any other region.

Chinese and British manufacturing products and investment will gain more access to enter each other's markets with lower tariff rates once their governments reach a free-trade agreement in the future, said Zhou Mi, a senior researcher at Beijing-based Chinese Academy of International Trade and Economic Cooperation.

British banks and insurance companies will also face less barriers to enter China's financial markets, he said, adding that the new FTA will also boost people-to-people exchanges, two way investment in services and high-end manufacturing sectors between the two nations.

The UK is not alone. China has already signed a free-trade agreement with non-EU members like Iceland and Switzerland. China and Norway are now in talks to reach a free trade deal.

Affected by the outbreak, trade in goods between China and the EU amounted to 1.23 trillion yuan ($173.25 billion) in the first four months of this year, dropping 6.5 percent year-on-year, while trade between China and the UK amounted to 147.74 billion yuan, falling 17 percent on a yearly basis, data from the General Administration of Customs showed.