6 Ways Brexit Could Be Beneficial to China’s Economy
1. The drop of the pound helps exporters, importers, new business and consumers-
Brexit could be to economic opportunity China needs, by giving the declining Chinese export market a short term quick boost, as Tony Qui the head of JD worldwide highlighted, ‘From a business perspective there will be an immediate impact because the purchase price will be lower as the pound falls in price,’ (Qiu, 30th June 2016, Telegraph). A weak Pound encourages new Chinese start-up export businesses who can enjoy the strong Yuan favoring exchange rates and establish strong business links while the British currency is low, and prepare for the rise in the pound. The next few months, while Britain is suffering, is a prime time for investors. The drop in the pound gives China an advantage over the European export market. A weak pound gives Chinese exporters an advantage over European businesses in trading with Britain.
2. New tailor made deal with China-
Britain will now look to negotiate wider deals with the financial powerhouses that they could not through the EU, with China being at the forefront of this new initiative. ‘There is concern that obviously having left the EU the UK will be looking to strengthen new trading relations with other parts of the world and therefore presumably we will want to be looking at doing even more with China’ (Rogers, 30th June 2016, Guardian). This could lead to a sustainable and significant hub for Chinese investment while the pound is low; Chinese corporations can establish a real footing in the British economy which could now dominate Europe economically if Brexit is a success.
3. Financial advisors now in demand-
Even positivists, myself included, would say that the Brexit result has caused uncertainty, this is felt especially among the economically uninformed Brits (of which there is a growing number), and when there is a financial risk, financial advisers are rubbing their hands, the demands in this sector will be massive. China and more specifically Hong Kong; a big player in the financial industry, can take advantage of this uncertainty in the general public. With the special relationship between Hong Kong and Britain plus the language skills and cultural similarities, the relationship brings will mean that China is in a prime position to offer financial advice. They will be in high demand to offer help and advice to the many who need guidance on what to do next; this is an industry that Brexit creates a boom for. Hong Kong can lead in this sector and establish a financial dominance that can benefit China’s economy in the long run.
4. Lower tuition fees-
Chinese students also benefit tremendously from Brexit. The naturally initial plus from Brexit for students is the lower cost of tuition fee because the pound is weak, tuition fees are less because of the strength of the Yuan exchange rate. The UK can also stop discriminating students from outside the EU thus meaning Chinese students will have an equal chance of obtaining a top degree at Oxford or Cambridge. ‘Qu Xinyi, a 22-year-old student, who will start a masters degree in journalism at Cardiff University in September said ‘Brexit had helped shave about 20,000 yuan off her tuition fees.’ (Xinyi, 30th June 2016, Guardian)
5. A fairer immigration policy favourable to Asia-
More world-class creative industry education from British universities is one way Brexit can boost China’s economy in the future. As England is a global leader in the creative industries, one of the few areas China doesn’t lead on, this is something that the UK can offer in abundance to China (as the outside EU immigration restrictions are to be lifted thanks to Brexit). The world renown teaching that is more easily available owing to Brexit means that China will have a stronger chance of competing in the lucrative creative industry. With these higher numbers of Chinese graduates from English Universities, potentially leading alongside Britain in the creative arts and media industries can help China vastly. Now there is an equal footing for all students, not EU nations having priority over Chinese students for places in Universities. A negative view on Brexit would suggest that some people from the EU may want to leave the UK, which will provide more opportunities for post-graduate Chinese young people who want to work in the UK who can take the place of migrating Europeans.
Article continues after jobs recommendation
6. Reformed EU focussing on trade
– I would also like to offer this variant of the future post-Brexit, and the changes that are made in Europe, of which there are no negative effects for Chinese jobs. One variable ahead in the short term which must be confronted is the possibility of Britain once again joining a reformed EU. The EU which has a tendency to ignore concerns about the course they have set of ever closer union which it has always done, but now this proposal is less popular among individual European nations than ever before. There is a strong possibility that nations such as Germany, with their own nationalistic rise, (especially as the main bank roller of Britain’s Brexit black hole in the European Union funding) will want the change from the EU’s current format and possibly reform it from within.
Britain with a strengthened and confident Conservative government for at least a decade may want to join this evolved EU; If it moves away from its ideological standpoint and once again focuses on finance and trade. Wang Hougzhang, the chairman of China Construction Bank, said ‘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’ (Hougzhang, 18th June 2016. BBC). The Chairman of the China Construction Bank has indicated that Britain may be seen as leading others away from the European Union in the next couple of years this could further strengthen the demand for a reformed Europe, in which unsettled European nations join. This will provide all the benefits that China has with dealing with the EU but will not irritate the British people who are concerned about democracy and immigration in the EU.