How will China be affected if Britain leaves European Union?
Beijing could lose influence within the bloc without London’s support
A possible exit of Britain from the European Union may add barriers to Chinese access to the European continent and add uncertainty to trade and investment talks with the bloc, analysts said.
They also said it might push Central and East European countries to seek closer economic ties with China.
With the US Federal Reserve deciding last week to hold off on an interest rate increase, all eyes turned to the other side of the Atlantic and Thursday’s British referendum on whether to leave the EU – a so-called “Brexit” – or remain in it.
The European Union [without the presence of Britain] is likely to adopt a more protectionist approach when dealing with China
Polls for the yes-or-no vote will open around Britain at 7am (2pm HK time) on Thursday, with the votes to be counted at 382 local centres from 10pm (7am HK time), when they close. A final result is expected to be announced by the end of the trading day in Asia on Friday.
Economists said a vote to leave the EU could panic financial markets and lead to capital outflows in mainland China, adding to depreciation pressure on the yuan and challenging the central bank’s management of monetary policy.
In the long run, a Brexit could affect China’s strategy in dealing with the EU as it might lose influence within the bloc without the support of Britain, which has backed an investment pact between China and EU and agreed to launch a joint feasibility study on China-EU free-trade agreement talks.