China’s Li says Brexit has increased global uncertainty

Britain’s vote to leave the European Union has increased uncertainty in the global economy, and China hopes for a united and stable EU and a prosperous United Kingdom, Chinese Premier Li Keqiang said on Monday.

Stock markets around the world plunged in the wake of Thursday’s referendum, while sterling’s value has also plummeted.

Britain’s vote “has showed its impact on the international market and further increased uncertainties in the global economy”, Li told the World Economic Forum (WEF) in the northern city of Tianjin, in the first public comments on Brexit by a top Chinese leader.

“I also want to say here that Europe is an important partner for cooperation with China, and China will continue to dedicate itself to maintaining the good development of Sino-Europe and Sino-British ties,” Li said.

“We would like to see a united, stable EU, and a stable, prosperous Britain,” he added.

“Against the backdrop of globalization, it’s impossible for each country to talk about its own development discarding the world economic environment.”

Li also called for global efforts to cope with challenges, the global economic recovery and boost investor confidence.

‘GOLDEN AGE’ FOR TIES

Though China and Britain have a history of disputes over human rights and the future of the former British colony of Hong Kong, export-reliant China has valued Britain as a strong advocate for free trade within the EU.

Relations between Britain and China have been warming over the past few years and economic links have multiplied, in what both countries refer to as a “golden age” in ties, a concept promoted by President Xi Jinping and British Prime Minister David Cameron, who announced his resignation following the referendum.

On Monday, influential state-run Chinese tabloid the Global Times warned that Britain’s troubles were far from over.

“Leaving the EU will not be the end of Britain’s difficulties, and will likely be the start of an incredibly painful process,” it said in an editorial.

China on Friday had called for Britain and the EU to reach agreement as soon as possible after the vote to leave the bloc, adding that China respected the choice of the British people.

On China’s outlook, Li told the WEF “So far this year, against the backdrop of slowing growth in the global economy, China’s economic operations remain relatively stable, with growth within a reasonable range.”

A pick-up in Chinese economic activity and company profits in March had fueled global investors’ hopes that the economy was improving, but readings in May were generally soggier, pointing to protracted weakness and the need for further policy support.

While industrial output seems to be steadying and property sales remain strong, growth in fixed-asset investment slowed to a 15-year low in January-May, while private investment was the weakest on record, dimming the outlook for the rest of 2016.

Source: Reuters