Chinese Premier On UK Visit

A Visit By The Chinese Premier Is Expected To Boost Bilateral Trade


Fergal Dowling, Partner | +44 (0)121 214 5476

The Chinese premier Li Keqiang has visited the UK and is expected to sign business deals worth £14 billion.

In a speech on the last full day of his visit to the UK, Mr Li said that China is interested in pumping money into the nation's rail, nuclear and gas industries - especially the controversial HS2 project.

Mr Li's visit to the UK commenced with a meeting with the Queen, the first summit of its kind since David Cameron angered the Chinese government for publishing a report criticising the country's human rights record.

But after this formal meeting, it is believed Mr Li was keen to discuss investment opportunities with large UK companies including BP and TheCityUK.

Speaking to reporters earlier today, Mr Cameron confirmed the Bank of England has been appointed as one of China's "big four" currency clearing banks, meaning that financial trade between London and Shanghai will be simplified.

Bank of England governor Mark Carney called the announcement an "important milestone", pledging that Chinese banks could play a vital role in strengthening the UK's position as a global business capital.

Sir Gerry Grimstone, head of financial services trade forum TheCityUK, told the BBC: "We're moving down a track very rapidly where London is going to become... the offshore centre for trading renminbi."

The currency arrangement follows a deal made in 2013 between former Bank of England governor Mervyn King and his counterpart, which allowed the People's Bank of China to swap £21 billion in UK accounts.

This, it was claimed at the time, would help UK SMEs to access the Chinese economy, although exports to the Far Eastern nation still lag behind other European countries.

Beijing has sought to expand its partnerships with a number of large and growing economies as part of its "soft power" political system, where it gains influence and control through economic, rather than military means.

Expert Opinion
In the ever-improving economy, it has become more and more apparent that SMEs are looking at how they can develop their operations and offer products and services abroad. As a result, news of this growing partnership between China and the UK will be welcomed by many businesses – including ambitious organisations looking to take a big step forward via exporting and other similar means

"However, as with any opportunity, it is important to recognise the potential growing pains which can emerge as a result of developing or expanding a business.

"This is why it is vital that small businesses ensure they have access to a top quality support network to help them make the next step in terms of development. Legal advice is a vital part of that system and we would urge small businesses to not ignore its importance as they look to grow."
Fergal Dowling, Partner