Rachel Reeves speaks during a press conference after the China-U.K. Economic and Financial Dialogue in Beijing, on January 11, 2025.
| Photo Credit: AP

China and Britain restarted economic and financial talks on Saturday (January 11, 2025) after a six-year hiatus during a visit by Britain’s Treasury chief to Beijing, as the U.K.’s Labour government seeks to reset strained ties with the world’s second-largest economy.

Rachel Reeves travelled to Beijing accompanied by a delegation of British business leaders and finance officials. She met with Chinese leaders including Vice-Premier He Lifeng and Vice-President Han Zheng.

The two sides revived the China-U.K. Economic and Financial Dialogue — annual bilateral talks that have been suspended since 2019 due to the COVID-19 pandemic and deteriorating relations. London hopes renewed dialogues will help bring down barriers that U.K. businesses face when looking to export or expand to China.

“Today, marks a significant milestone in the U.K.-China relationship with the first Economic and Financial Dialogue between our countries for nearly six years,” Ms. Reeves said. She said the meeting signaled the new U.K. government’s “commitment to fostering a stable, long-term partnership” with China and desire to boost economic cooperation.

“Britain wants to improve exchanges in areas such as sustainable finance, capital markets connectivity, pensions and regulatory alignment, as well as trade and investment,” Ms. Reeves added.

“As part of this, it is important to prevent economic links weakening our national security and economic resilience,” she said.

The Vice-Premier said China and Britain should improve cooperation in trade and investment, clean energy, financial services, the green economy, biomedicine, artificial intelligence and other fields.

“We are willing to work with the U.K. to create a fair, just and non-discriminatory business environment and provide good conditions for the other side’s companies to invest and operate in each other’s countries,” he said.

The Sino-British ties have soured following a series of spying allegations from both sides, China’s support for Russia in the Ukraine war and a crackdown on civil liberties in Hong Kong, a former British colony.

British officials said Ms. Reeves will also urge Beijing to stop its material and economic support for the Russian war effort in Ukraine and raise the issue of rights and freedoms in Hong Kong.

The delegation included Bank of England Governor Andrew Bailey and the CEOs of the U.K. Financial Conduct Authority and the London Stock Exchange Group. Senior executives from some of Britain’s biggest financial services firms, including the group chairs of HSBC and Standard Chartered, were also included.

Ms. Reeves’ visit comes after Foreign Secretary David Lammy traveled to China in October and Prime Minister Keir Starmer met with Chinese President Xi Jinping on the sidelines of the G20 summit in Brazil in November.

It’s all part of a bid by Mr. Starmer, elected as leader in July, to strengthen political and economic ties with China, the U.K.’s fourth-largest single trading partner, according to the Treasury.

Officials said Mr. Starmer wanted a “pragmatic” approach to working with Beijing on global stability, climate change and the transition to clean energy. But some in the Opposition Conservative Party have criticised his stance and said trade ties should not come at the expense of national security and human rights concerns.

British political leaders and intelligence chiefs have repeatedly warned that China poses security threats. Calls to tackle the challenge grew louder last month when it emerged that an alleged Chinese spy had cultivated close ties with Prince Andrew and carried out “covert and deceptive activity” for China’s ruling Communist Party, according to officials.

“National security is the foundation of what any government acting in the national interest will prioritise,” Ms. Reeves said. “But, we need to make sure that we have pragmatic and good relations with countries around the world. That is in our national interest.”

Rachel Reeves File photo
| Photo Credit: Reuters

British government debt hit 100% of economic output for the first time in recent history and there was another large budget deficit last month, adding to the problems for finance minister Rachel Reeves as she readies her tax and spending plans.

Public sector net debt, excluding public sector-owned banks, rose to 100% of GDP for the first time since monthly records began in 1993, up from 99.3% in July, the Office for National Statistics said on Friday (September 20, 2024).

Bank of England records show debt was last running at this level on a regular basis in the early 1960s, when Britain was still dealing with the financial repercussions of World War Two.

Government debt soared during the global financial crisis and then again during the COVID-19 pandemic. Weak economic growth since then has also contributed to the increase as a share of gross domestic product.

The government borrowed 13.734 billion pounds ($18.29 billion) in August, 3.3 billion pounds more than in August last year. A Reuters poll had pointed to a deficit of 12.4 billion pounds.

The figures showed a rise in spending on social benefits and current expenditure, reflecting higher than usual inflation.

Ms. Reeves has warned taxes will go up in her October 30 budget but she has ruled out increases in rates of income, corporation and value-added taxes, leaving scant room for manoeuvre to improve public services and boost investment.

“The August public finances figures highlight the challenging fiscal position facing the Chancellor ahead of her first budget,” said PwC economist Gora Suri.

So far the government has borrowed 64.1 billion pounds over the first five months of the 2024/25 financial year – about 6 billion pounds more than the Office for Budget Responsibility’s forecast that it published in March.

The deficit figures have come in higher than the OBR expected for each of the last four months.

Several hundreds of billions of pounds worth of government debt is owned by the Bank of England. Excluding the BoE, debt as a share of the economy rose to 92%, another record, from 91.6% in July. ($1 = 0.7510 pounds)

Britain’s first woman finance minister Rachel Reeves.
| Photo Credit: AP

Rachel Reeves, Britain’s first woman finance minister, is a former child chess champion and Bank of England economist who has pledged to grow the nation’s economy while showing strong fiscal discipline.

Reeves, 45, becomes chancellor of the exchequer after her centre-left Labour party won Thursday’s U.K. general election by a landslide, ending 14 years of rule by the right-wing Conservatives.

Also Read :Landslide win for Labour; Keir Starmer appointed new PM

“It is the honour of my life to have been appointed chancellor of the exchequer,” Ms. Reeves wrote on social media platform X after her appointment by new Prime Minister Keir Starmer.

“To every young girl and woman reading this, let today show that there should be no limits on your ambitions.”

Labour had put the economy at the heart of its election manifesto, targeting growth and wealth creation as key priorities in government, while its emphasis on the latter is not normally associated with the party’s traditionally leftist policies.

“Economic growth was the Labour Party’s mission,” Ms. Reeves added on Friday.

“It is now a national mission. Let’s get to work,” said the married mother of two children.

‘Iron chancellor’

Ms. Reeves recently told company bosses that Labour had become “the natural party of British business”, adding that the party would show “iron discipline” over public finances.

The comments drew comparisons with ‘Iron Lady’ Margaret Thatcher, Britain’s first woman prime minister.

Unlike Conservative leader Thatcher, who privatised key sectors after becoming prime minister in 1979, Ms. Reeves wants a form of renationalisation, notably for energy, as she takes inspiration from policy enacted by US President Joe Biden.

Labour has pledged to create Great British Energy, a publicly owned company that would spearhead funding, alongside the private sector, for the “green” transition away from fossil fuels.

James Wood, senior teaching associate in political economy at the University of Cambridge, said Labour and Reeves were seeking a “responsible” approach to the public purse.

“When she talks about being an iron chancellor, I think what she means is: we’re going to balance the books and we’re going to be responsible — and we’re going to try and get Britain’s economy running… in a responsible way,” he told AFP.

London-born Ms. Reeves tapped into public anger over Mr. Sunak’s predecessor Liz Truss, whose unfunded 2022 mini-budget crashed the pound and sent mortgage rates soaring, worsening a cost-of-living crisis.

“They want to distance themselves from fiscal irresponsibility, not making big promises about spending that they can’t possibly keep,” Wood added.

Banking career

Ms. Reeves, whose parents were teachers, is no stranger to outmanoeuvring opponents.

She became British girls’ chess champion aged 14 before studying philosophy, politics and economics at the University of Oxford, which was followed by a Master’s degree at the London School of Economics.

After graduating, she worked as an economist for a decade, first at the Bank of England before switching to the private sector.

While working for British retail bank HBOS, the global financial crisis struck in 2008, resulting in her employer receiving a huge bailout, along with other lenders, from Gordon Brown’s Labour government.

In 2010, when the Conservatives entered power in a coalition with the Liberal Democrats, Reeves was elected Labour MP for Leeds West in northern England.

Eleven years later, Starmer appointed her as Labour’s finance spokesperson. Her sister Ellie Reeves is also a Labour MP.

Rachel Reeves, Britain’s first woman finance minister, is a former child chess champion and Bank of England economist who has pledged to grow the nation’s economy while showing strong fiscal discipline.

Reeves, 45, becomes chancellor of the exchequer after her centre-left Labour party won Thursday’s UK general election by a landslide, ending 14 years of rule by the right-wing Conservatives.

“It is the honour of my life to have been appointed chancellor of the exchequer,” Reeves wrote on social media platform X after her appointment by new Prime Minister Keir Starmer.

“To every young girl and woman reading this, let today show that there should be no limits on your ambitions.”

Labour had put the economy at the heart of its election manifesto, targeting growth and wealth creation as key priorities in government, while its emphasis on the latter is not normally associated with the party’s traditionally leftist policies.

“Economic growth was the Labour Party’s mission,” Reeves added Friday.

“It is now a national mission. Let’s get to work,” said the married mother of two children.

‘Iron chancellor’

Reeves recently told company bosses that Labour had become “the natural party of British business”, adding that the party would show “iron discipline” over public finances.

The comments drew comparisons with ‘Iron Lady’ Margaret Thatcher, Britain’s first woman prime minister.

Unlike Conservative leader Thatcher, who privatised key sectors after becoming prime minister in 1979, Reeves wants a form of renationalisation, notably for energy, as she takes inspiration from policy enacted by US President Joe Biden.

Labour has pledged to create Great British Energy, a publicly owned company that would spearhead funding, alongside the private sector, for the “green” transition away from fossil fuels.

James Wood, senior teaching associate in political economy at the University of Cambridge, said Labour and Reeves were seeking a “responsible” approach to the public purse.

“When she talks about being an iron chancellor, I think what she means is: we’re going to balance the books and we’re going to be responsible — and we’re going to try and get Britain’s economy running… in a responsible way,” he told AFP.

London-born Reeves tapped into public anger over Sunak’s predecessor Liz Truss, whose unfunded 2022 mini-budget crashed the pound and sent mortgage rates soaring, worsening a cost-of-living crisis.

“They want to distance themselves from fiscal irresponsibility, not making big promises about spending that they can’t possibly keep,” Wood added.

Banking career

Reeves, whose parents were teachers, is no stranger to outmanoeuvring opponents.

She became British girls’ chess champion aged 14 before studying philosophy, politics and economics at the University of Oxford, which was followed by a Master’s degree at the London School of Economics.

After graduating, she worked as an economist for a decade, first at the Bank of England before switching to the private sector.

While working for British retail bank HBOS, the global financial crisis struck in 2008, resulting in her employer receiving a huge bailout, along with other lenders, from Gordon Brown’s Labour government.

In 2010, when the Conservatives entered power in a coalition with the Liberal Democrats, Reeves was elected Labour MP for Leeds West in northern England.

Eleven years later, Starmer appointed her as Labour’s finance spokesperson. Her sister Ellie Reeves is also a Labour MP.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)