In a slap-down of claims by Prime Minister David Cameron and Deputy Prime Minister Nick Clegg that Britain would be “isolated” if it left the European Union, one of China’s most senior economic figures has said it would make no difference to the UK’s trading relations with China.
“Whether the UK will stay in the EU or not, will not do any harm to trade and economic ties or financial relations between the UK and China,” Wang Hongzhang, chairman of the China Construction Bank, China’s second largest lender, told the BBC in an interview yesterday.
“We have a smaller world and everyone is connected with each other and it is the age of globalisation. I think [whether] the UK stays in the EU or not will not have an impact,” he said.
Wang’s opinion, coming from a man who the heads a bank the BBC says is worth over $200bn (£118bn) and accounts for more than 12 per cent of all loans and deposits in China, is a vindication of the stand Nigel Farage, leader of the UK Independence Party, took in his televised debates earlier this year with Nick Clegg on Britain’s membership of the EU.
In one exchange, following a question asking how Britain could do trade deals with China without being in the EU, Clegg insisted Britain had “more clout” by being part of the EU.
Farage countered that Clegg did not understand trade. “When the WTO [World Trade Organisation] meets,” said Farage, “the UK is out of the room, even though we are the sixth largest trader, and eighth largest manufacturer, Britain cannot strike is own trade deals. It cannot strike a trade deal with India. But Iceland has just struck a deal with China.”
Farage was referring to a free trade deal Iceland agreed with China in April 2013. The EU has not yet negotiated one.
“If it is good enough for Iceland to do it, I’m damned certain the British with 64 million can do even better,” said Farage.
The chairman of China’s second biggest bank appears to agree.
The China Construction Bank has just been named as the first bank designated for off-shore trading in renminbi, the Chinese currency. It has chosen London as its base.
This decision will further London’s ambitions to be the leading foreign exchange trader in renminbi outside China and Hong Kong.
Wang told the BBC the off shore settlement deal cemented London’s place as the leading financial centre in Europe. Frankfurt or Luxembourg could have been other options but the City’s long history as the place to “internationalise” currencies appears to have been the clincher.
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