UK supports the ‘Belt and Road Initiative’ behind the scenes
Among the more visible areas of involvement is finance, with British banks quick to join China’s global trade initiative
British Prime Minister Theresa May was careful to ensure that there was no official backing for China’s “Belt and Road Initiative” when she led a major trade delegation to Beijing in January.
But there is indirect support as Britain searches for strategic partners in a post-Brexit era. “For the UK, the recognition of its new status – clearly out of the European Union and most likely a hard Brexit scenario – has pushed May towards an intermediary role,” Natixis said in a report summarising May’s visit with about 50 ministers and business leaders.
The UK will become the first large advanced economy to support the initiative, if not directly. London is also identified as a key participant for financing. British and Chinese banks are invited to collaborate in financing the initiative, and the UK government has agreed to contribute to a new Asian Infrastructure Investment Bank (AIIB) fund for the same purpose.
“The UK government has been trying to switch towards a more bilateral relationship with China and two major issues stand out this time.
“First, the UK will become the first large advanced economy to support the initiative, if not directly. London is also identified as a key participant for financing. British and Chinese banks are invited to collaborate in financing the initiative, and the UK government has agreed to contribute to a new Asian Infrastructure Investment Bank (AIIB) fund for the same purpose.
“Second, Theresa May has clearly pushed for London to connect to China’s capital market. The most imminent action will be a London-Shanghai Stock Connect. A bond connect is also mentioned but is clearly less immediate,” said Nataxis.
The visit ended with delegates finalising deals worth about £9 billion (HK$92.34 billion) in areas such as finance, innovation, agriculture and technology, according to China’s Ministry of Commerce.
