UK-China Free Trade Deal At Risk?

Forex News

Last month, China and Britain agreed to look at the possibility of reaching a post-Brexit free trade deal which, if struck, would be an important political win for Britain's Conservative government. The UK has pushed a strong message to Chinese companies that it is fully open for business as it prepares to leave the EU next year. China is one of the countries with which Britain would like to sign a post-Brexit free trade deal.

Beijing has threatened to stall post-Brexit trade deal talks with the UK, after the Royal Navy’s “freedom of navigation” voyage in the South China Sea last week. A Royal Navy warship sailed close to islands, called the Paracels, claimed by Beijing in the South China Sea on August 31, triggering an angry reaction from the Chinese government.

A major Chinese state-run newspaper warned, that Britain could have hurt its chances of sealing a post-Brexit free trade deal with China, after a Royal Navy warship sailed close to islands in the South China Sea claimed by China. "China and the UK had agreed to actively explore the possibility of discussing a free trade agreement after Brexit. Any act that harms China's core interests will only put a spanner in the works," the official China Daily newspaper said in an editorial.

"Certain countries from outside the region pay no heed to this, and send military ships and aircraft to the South China Sea to foment trouble, creating problems where none exist, threatening regional peace and stability," China's Defence Ministry said in its statement.