Treasury scrambles to finalise China economic talks

The Treasury is racing to re-establish a key economic summit with the Chinese government, three years after the previous chapter of a purportedly annual round of talks.

Sky News has learnt that Whitehall officials have pencilled in a date at the end of this month to stage the 11th UK-China Economic and Financial Dialogue (EFD), the last iteration of which took place in 2019.

However, last week’s resignation of the chancellor, Rishi Sunak, and the decision of his successor, Nadhim Zahawi, to enter the race for the Conservative Party leadership have prompted industry concerns that the EFD could face postponement until later this year.

City insiders said talks had already been held between officials about issues including sustainable and green finance, which would be expected to feature prominently on the EFD agenda.

The COVID-19 pandemic and the deteriorating political relationship between Britain and China have combined to defer any summit since 2019, but officials on both sides are said to remain optimistic about the possibility of a meeting within weeks.

If it does go ahead, it is likely to be held virtually, although under the rotating agreement it is nominally China’s turn to host the summit.

It would nevertheless represent an important event on the international stage for Mr Zahawi to cement his leadership credentials.

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China is Britain’s third-biggest trading partner, and under David Cameron, the then prime minister, the UK government sought to establish a “golden era” of trade with the world’s most populous nation.

The government’s decision to exclude Huawei Technologies from Britain’s 5G network, last year’s tensions in the South China Sea, and growing hostility towards Chinese investment in the UK from Conservative MPs such as Tom Tugendhat, another leadership contender, were, however, responsible for more recent frosty relations between Westminster and Beijing.

A year ago, the Chinese premier, Li Keqiang, held talks with directors from FTSE-100 companies including Diageo, HSBC, Rio Tinto and Standard Chartered to discuss bilateral trade.

Mr Li told the British company bosses that China would continue to open its markets to give them greater access to the country’s fast-growing middle classes.

In his final Mansion House speech as chancellor, Mr Sunak said the improvement of trade ties with China was a priority, calling for “a mature and balanced relationship” between the countries.

Despite the political turmoil in Westminster, this year’s Mansion House dinner – at which the governor of the Bank of England and the Lord Mayor of the City of London also traditionally make speeches – is expected to take place as scheduled on 19 July.

A Treasury spokesperson declined to comment.

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