Source: BBC

By Kamal Ahmed

Chancellor Philip Hammond has begun discussions with China on an ambitious free trade deal which could see greater access for major Chinese banks and businesses to the UK economy.

The Chancellor told the BBC it was time to explore “new opportunities” across the world, including with China, one of the UK’s biggest inward investors.

That is despite a short term economic shock from leaving the European Union.

He added that the EU is not in “punishment mode” over the Brexit vote.

“What we now need to do is get on with it in a way that minimises the economic impact on the UK economy in the short term and maximises the benefit in the long term,” Mr Hammond said, admitting that there had been “global disappointment” about the Brexit vote.

Chinese state media reported earlier in the month that the Chinese Ministry of Commerce wants to do a UK free trade deal.

Mr Hammond has now revealed that Britain is also keen.

It will be the first time the UK has embarked on such a major project with the second largest economy in the world.

And will raise concerns about cheap manufactured goods entering the UK more easily.

‘More opportunity’

In return for greater access to the UK for its manufactured products and investment, China would reduce barriers to Britain’s service industries like banking and insurance as well as UK goods.

That would be an important source of export income for Britain.

“The mood music that I have heard here is very much that this will mean more opportunity for countries like China that are outside the European Union to do business with Britain,” Mr Hammond said.

“And as Britain leaves the European Union and is not bound by the rules of the European Union perhaps it will be easier to do deals with Britain in the future.”

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