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Shanghai Mayor Gong Zheng (right) shakes hand with visiting UK Chancellor of the Exchequer Rachel Reeves in Beijing on January 12, 2025. Photo: Information Office of Shanghai Municipality

UK Chancellor of the Exchequer Rachel Reeves visited Shanghai on Sunday after holding a series of meeting with senior Chinese officials in Beijing on Saturday, during which the two sides reached a series of mutually beneficial outcomes and consensuses, according to the Xinhua News Agency, marking an improvement in Chinese-British economic and trade relations.

Shanghai Mayor Gong Zheng met Reeves on Sunday. "We look forward to the city of Shanghai and the UK strengthening economic exchanges, industrial investment, financial opening-up and tech innovation cooperation, and warmly welcome British companies to attend the China International Import Expo this year and increase their presence in Shanghai in sectors such as clean energy, advanced manufacturing and healthcare," Gong said.

Reeves said Shanghai plays an important role in China-UK cooperation, with two-thirds British companies operating in China building their headquarters in Shanghai. 

Looking ahead, we hope to cooperate in more areas to promote the common development of the two economies and to bring UK-China cooperation to a new level, she said, according to a press release from the Shanghai government.

On Saturday, Chinese Vice President Han Zheng met Reeves, who was in Beijing for the 11th China-UK Economic and Financial Dialogue.

China and the UK are both major economies and financial heavyweights in the world, Han said, pointing out that strengthening economic and financial cooperation in the spirit of strategic partnership is of great significance to promoting economic growth, improving people's lives and encouraging green development in these two countries. 

It will also inject confidence and impetus into the development of the world economy, Han added.

Also on Saturday, Chinese Vice Premier He Lifeng and Reeves co-chaired the 11th China-UK Economic and Financial Dialogue - an important mechanism for dialogue and cooperation on strategic, overall and long-term major issues in the economic and financial fields - after a nearly six-year hiatus. 

He said that China is willing to work with the UK to implement the important consensus reached by the leaders of the two countries, uphold the positioning of strategic partners, strengthen communication and dialogue, further expand economic and financial cooperation, and provide more impetus for the development of stable and mutually beneficial China-UK relations.

Reeves said that the UK is willing to strengthen practical cooperation with China in the fields of economy and finance, and develop a consistent, lasting and mutually respectful relationship between the two countries.

During the dialogue, the two sides reached a series of mutually beneficial outcomes and consensus, the Xinhua News Agency reported. 

As the first senior British official to visit China in 2025, Reeves' trip hit the headlines of many Western media outlets. The Associated Press highlighted Reeves' emphasis of the need for a "stable, pragmatic" UK-China relationship. The Guardian said the trip "assumed an even greater significance" after a turbulent week on the financial markets in which UK borrowing costs climbed close to a 16-year high on Friday.

Titled "Reeves seeks growth on China visit after UK's market pain," Bloomberg said the landmark exchange reflects the British Labour government's efforts to stay focused on long-term plans to get the British economy growing again.

"The resumption of the dialogue mechanism reflects the relatively positive and pragmatic attitude of the Starmer government toward China-UK economic and trade cooperation," Zhao Huaipu, a professor at China Foreign Affairs University, told the Global Times on Sunday.

The nature of China-UK economic and trade cooperation is mutually beneficial. With China being such a large economy, there is huge potential for the UK to deepen cooperation with China in fields including finance, green development and trade in luxury goods, Zhao said. As US President-elect has threatened tariffs on multiple countries, the UK government needs to develop economic and trade ties with China to hedge potential risks in US-UK relations, he said.

Strengthened cooperation

A range of financial services companies with a substantial presence in the market - HSBC, Standard Chartered, Prudential, Schroders, abdrn, Fidelity International and London Stock Exchange Group - accompanied the Chancellor as a business delegation on the trip, according to the UK government website.

According to the People's Bank of China (PBC), the country's central bank, Pan Gongsheng, governor of the PBC, met with Mark Tucker, Chairman of HSBC, Jose Vinals, Chairman of Standard Chartered, and David Schwimmer, CEO of LSEG, on Friday before the 4th China-UK Financial Services Summit held on Saturday. They exchanged views on issues including global economic and financial development, China's macroeconomic and financial policies and bilateral financial cooperation.

"China is the world's second-largest economy, the world's top goods exporter, second-largest source of merchandise imports and the UK's fourth-largest trading partner. Deepening the UK-China partnership on trade, investment, finance, health, education and climate change amongst other priority areas, is vital to delivering growth, investment and high-quality jobs for both China and the UK," Tucker told the Global Times. 

"As a UK-headquartered bank with a long history in China, we continue to see significant growth potential and opportunities to collaborate, as evidenced by the permission to trade China Treasury Bond Futures and receipt of our Type A Bond Underwriting license," Vinals was quoted as saying in a statement sent to the Global Times.

"Looking ahead, we encourage further cooperation between our two markets and are enthusiastic about what we, and partner financial institutions, can do to help deliver impactful initiatives such as those in sustainable and transition finance," Vinals said.

On Saturday, Li Yunze, head of the National Financial Regulatory Administration, met with Nikhil Rathi, Chief Executive of UK's Financial Conduct Authority and Andrew Bailey, Governor of the Bank of England, separately.

Challenges persist

Despite the reasonable voice for China-UK economic and trade cooperation, British media outlet The Independent touted that "Labour have abandoned their principles by seeking deals with China in a desperate attempt to save Britain's faltering economy."

Citing Iain Duncan Smith, former Tory leader and China critic, the report said that Reeves' trip to enhance economic and trade ties with China was "a return to 'operation kowtow,'" which he claimed was "quite awful and dreadful." 

"It's not uncommon to see certain Western media outlets randomly tag 'kowtow' if some countries improve ties with China. This obsolete narrative is full of ideological biases and narrow-minded prejudice," Cui Hongjian, a professor at the Academy of Regional and Global Governance at Beijing Foreign Studies University, told the Global Times on Sunday.

The UK currently has greater demand for strengthening China-UK economic and trade cooperation, so adjusting its China policy is in the UK's own interests, Cui said.

Li Guanjie, a research fellow with the Shanghai Academy of Global Governance and Area Studies under the Shanghai International Studies University, told the Global Times on Sunday that such "noises" within the UK are unlikely to disrupt Labour's China policy if the Starmer government is determined to improve China-UK economic and trade relations.