May walks tightrope between trade, politics in China

Bloomberg

UK Prime Minister Theresa May arrived in China seeking to balance her desire to build a powerful post-Brexit trade relationship with a clutch of political concerns.
At the start of a three-day trade mission to the country, May said she would raise the sensitive topics of China’s human rights record and Hong Kong democracy in talks with President Xi Jinping and Premier Li Keqiang. Her reluctance to formally endorse Xi’s global Belt and Road trade-and-infrastructure initiative also risks impeding her pursuit of more robust ties.
“China is a country that we want to do a trade deal with,” May told reporters on board her flight from London to Wuhan, which landed on Wednesday. The nature of the relationship between the two countries means she can still discuss “those issues” of concern, she said. “I will be raising both human rights and the issue of Hong Kong.”
May’s business mission to China is meant to demonstrate her government’s intent to forge a global trade policy after leaving the European Union next year. While the UK can’t sign any deals outside the EU before leaving the bloc — and wouldn’t be able to implement them before at least 2021 — she’s hoping to strike now, while Xi works to establish himself as a leading defender of globalization.
China is also keen to build greater ties with a key US ally and long-time pillar of Europe. Even before Brexit, May’s predecessor, David Cameron, had promised a “golden era” of relations with China, hosting Xi on a state visit in October 2015.
A commentary published on Wednesday by the state-run Xinhua News Agency said the “‘liberating effect’ of Brexit” could help ties between the two sides reach a “new high.” China and the UK plan to step up cooperation in energy, nuclear technology, high-speed railways, aerospace and artificial intelligence, Xinhua said.
The two sides are discussing the feasibility of a bond-trading link that would mark a fresh step in opening up the world’s largest emerging debt market, Bloomberg reported last month, citing people familiar with the matter.

TRADE BARRIERS
May’s delegation — which includes 50 business leaders, Trade Secretary Liam Fox, a clutch of officials and her husband — are optimistic about progress toward formal trade talks. The group includes Pascal Soriot, chief executive officer of AstraZeneca; Mark E. Tucker, chairman, HSBC Holdings plc; Ralf Speth, CEO, Jaguar Land Rover; Bill Winters, group chief executive, Standard Chartered Bank; and Nikhil Rathi, CEO, London Stock Exchange Group.
“A number of the businesses here are looking to confirm some deals in China which will be good for the UK economy,” May said. “There’s more that we can be doing in the interim, right now, in terms of looking at potential barriers to trade and the opening up of markets.”
Asked why she wouldn’t formally join the Belt and Road Initiative, May struck a diplomatic tone, saying the plan had the “potential to be a hugely significant investment and to have a huge, significant impact.”

TRANSPARENCY, STANDARDS
She added a caveat: “What I would like to see is ensuring that we have transparency and international standards being adhered to — and I will be discussing that with my Chinese interlocutors,” she said. Standard Chartered said in December that it plans to facilitate at least $20 billion of financing for the Belt and Road Initiative by 2020.
There were more cautionary words from May on China’s human rights record and concerns over democracy in the former British colony of Hong Kong, which the UK returned in 1997 on a promise to maintain the city’s “high-degree of autonomy” for 50 years. The European Union warned that Hong Kong risked diminishing its “international reputation as a free and open society” after banning a pro-democracy activist from running for the city’s legislature. “We believe that the future of Hong Kong, that ‘one country, two systems’ future is important,” May said.

May slams leaked Brexit analysis
Bloomberg

UK Prime Minister Theresa May attacked a leaked government analysis predicting economic damage from Brexit, calling it skewed information and not a true evaluation of the effects of leaving the European Union.
“It would be wrong to describe this as ‘the Brexit impact assessment.’ There’s analysis being done — this is very preliminary,” May told reporters traveling with her to China on Wednesday.
“What’s been seen so far is a selective interpretation of a very preliminary analysis, which ministers have not signed off, have not approved, and which doesn’t actually even look at the sort of deal that we want to deliver.”
May is under pressure to spell out her plans for the “end state” trade deal she’s seeking to agree with the EU. The document — first reported by BuzzFeed — found that each of the three scenarios modeled, from no trade deal with the EU to membership of the European Economic Area, would hit growth. The hardest Brexit would reduce the UK economy’s growth by 8 percent over 15 years time, and the softest would still see expansion slow by 2 percent.
May promised to provide useful analysis when she has finalized her negotiation with the EU so lawmakers can make an informed decision on whether to accept her deal.
“When the time comes for Parliament to vote on the final deal, we will ensure that Parliament has the appropriate analysis on which to be fully informed and on which to base their judgment,” May said. “But it would be wrong to publish analysis before that analysis has been completed and it would also be wrong to publish analysis which might prejudice our negotiating position.”