Britain cannot afford to turn China’s neck, says City minister

Britain cannot afford to give China the “cold shoulder”, City’s minister said on Monday in comments that will distance the British government from the Biden administration’s protectionist actions.

Addressing financial services bosses at the City Week conference in London’s Guildhall, Bim Afolami said it was “crucial” to engage with strategic competitors such as Beijing, and that Britain risked losing control lose its economic future if it fails to find common ground.

“As with any bilateral relationship, we do not agree on everything, [but] we are very clear that you simply cannot give the cold shoulder to an economy that is home to a fifth of the world’s systemically important banks, four of the world’s largest banks and almost a third of the world’s leading global financial centers. It just doesn’t make sense,” he said.

“That is why it is in our interest to intervene where possible. [It is] It is deeply in our interest to do this.”

Afolami said keeping the door open to Beijing would mean the two countries could tackle shared challenges together, including the climate crisis, biodiversity loss and aging populations. “As far as China is concerned, we are looking at the long term.”

He stressed that Britain “should of course only intervene if it is consistent with our interests. But let there be no doubt that this is absolutely not the same as withdrawal.”

Afolami added: “If we hesitate too much – as Lord Cameron, the Foreign Secretary himself, noted two weeks ago – our competitors will write our future for us.”

The minister’s comments will help Britain move away from the policies of US President Joe Biden, who last week announced tougher tariffs on $18 billion of Chinese goods including electric vehicles, lithium batteries, critical minerals and semiconductors.

The move is intended to protect U.S. manufacturers from cheap imports from China, but risks inflaming trade tensions between the world’s two largest economies.

Meanwhile, the British government continues to court Beijing and Chinese companies, including fast-fashion company Shein, which is stepping up preparations for a London stock exchange listing at a time of declining interest in the British stock market.

Shein, which one of the sources said was valued at $66 billion in a fundraising last year, began talks with London-based financial and legal advisers to explore a stock market listing early this year, according to reports, after an attempt to float in New York faced regulatory hurdles and resistance from US lawmakers. It could well be the biggest share price in London in years.

However, there are still concerns about Chinese interventions in Britain. Two weeks ago it emerged that 270,000 payroll details of almost all members of the British Armed Forces had been exposed to Chinese hackers.

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The Labor Party has said it will launch a “full audit” of Britain’s relations with China if the country wins the next election.

Britain’s competitiveness on the international stage was also discussed on Monday by Julia Hoggett, chief executive of the London Stock Exchange, who continued the group’s campaign for higher executive pay.

Hoggett praised the company’s board members for sticking their necks out this year and offering bigger payouts to bosses, even though this proved unpopular with some shareholders. It follows a new wave of disagreement among shareholders, including at Smith & Nephew and pharmaceutical company AstraZeneca, over multimillion-pound pay rises.

“We have seen a much greater willingness from remuneration committees to take what I call ‘the naughty step’ by accepting that some resolutions will gather more than 20% of the vote against them,” she said during a keynote speech at the Event City Week. Companies that receive at least 20% opposition from their shareholders must justify their pay decision and are put under the spotlight by asset management groups.

However, Hoggett suggested more companies should jump on board. “However, it remains my belief that this is more in our hands than we think. As parents we all know that the naughty step is not a naughty step if everyone is on it.”

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