Reeves says London is 'natural home' for Chinese finance and defends Bejing trip
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Rachel Reeves has labelled London a “natural home” for Chinese finance as she defended her decision to travel to Bejing in the shadow of soaring borrowing costs. Increases in the Government’s borrowing costs have sparked concern that the Chancellor will be unable to meet her debt and spending targets, requiring either tax rises or deeper spending cuts when she delivers a fiscal statement at the end of March.
Opposition parties have criticised the Chancellor for making the trip to Chia, with Shadow chancellor Mel Stride saying she had “got her priorities badly wrong” and “absented herself on the far side of the world” while “her economic decisions here are pivoting us back towards the 1970s”.
Liberal Democrat deputy leader Daisy Cooper also urged the Chancellor to “come back now to urgently address the ongoing crisis in the markets and announce a serious plan for growth”. But speaking to reporters in Beijing, where she is seeking to rebuild economic ties with China, the Chancellor declined to give a “running commentary” on the markets but insisted her fiscal rules were “non-negotiable”.
The turbulence on the gilt markets, where yields reached their highest level since 2008 earlier in the week, has overshadowed the Chancellor’s trip. The visit, during which she met Chinese vice-president Han Zheng and vice-premier He Lifeng, is the first high-level economic meeting between Britain and China since 2019.
Speaking at the reopening of long-suspended finance talks between the two countries, Ms Reeves said London was a “natural home for China’s financial services firms and your clients raising capital, and a launchpad for Chinese firms seeking to build a global footprint”.
