(Bloomberg) -- The U.K. is pushing to solidify its future trading relationship with China, but Beijing is wary of providing any commitments until it sees how the Brexit deal plays out, according to a senior British trade official.
Barred from forging any trade agreements before it leaves the European Union, the U.K. is already laying the groundwork for a possible pact with China in the future, said Richard Burn, Britain’s newly-appointed trade commissioner to the world’s biggest trading nation.
The U.K. hopes to negotiate new trade deals or treaties with China “during the two year implementation period after March 2019,” Britain’s deadline for exiting the EU, Burn said in an interview in Beijing Wednesday. But “China will be cautious about making any commitment until they see what we have agreed with the EU on that.”
The two nations launched a review of their $77 billion trading relationship during Prime Minister Theresa May’s visit to China last week, as the U.K. seeks to build ties with markets outside of Europe that could prove crucial to British exports once it leaves the EU. The review will provide the basis for future trade talks with China, which will be one of the top priorities when the U.K. is free to negotiate deals, Burn said. He hopes any future trade pact with China would cover areas like financial services, life sciences and high-end technology.
Unlike the U.S., which has been vocal on what President Donald Trump has characterized as an unfair trade imbalance with China, Burn doesn’t see the U.K.’s own deficit with the Asian nation as an issue. The gap is likely to narrow over time, as British exports to China are rising at a faster pace than Chinese imports into the U.K., he said.
Chinese leaders have been signaling there may be more moves this year to open up the economy and financial system, after taking the significant step last year of saying they will ease foreign ownership restrictions on banks and brokerages.
The U.K. is pushing for more details on when this shift will be implemented and is urging China to get it done sooner, according to Burn, who is based in Beijing and was formerly Director General for the U.K.’s Department of Trade in China. A long-planned stock conduit between the equity markets of London and Shanghai still has a long way to go, but the U.K. hopes “it could be launched in 2018,” he said.
The stock-link plan has been in the works since at least 2015: read more here.
The envoy also voiced concerns over potential spillover from a U.S.-China trade war.
“Both sides would suffer, and our economy would suffer, too -- so we hope that doesn’t happen,” Burn said. “From a U.K. point of view, we prefer to solve the difficulties quietly through discussions instead of empty threats.”
A former director of corporate relations for liquor company Diageo (LON:DGE) Plc, Burn has engaged with China in both private-sector and U.K. government roles. He worked under former Prime Minister Edward Heath, who established diplomatic relations with Communist China in the 1970s.
