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Brexit

‘Hong Kong could suffer if Britain seeks closer ties with Beijing after leaving EU’

UK could lose leverage on the city’s affairs as it looks to secure new trade deals, analyst warns

PUBLISHED : Sunday, 17 July, 2016, 6:23pm
UPDATED : Sunday, 17 July, 2016, 8:11pm

Hong Kong could be further marginalised if Britain pursues a free trade deal with China in one of its first moves in a post-European Union future, an analyst has warned.

Boris Johnson, Britain’s new foreign secretary and chief diplomat – who will ultimately engage with Beijing – has a record of making public statements in favour of stronger China ties.

“Free trade would bring greater prosperity in both Britain and China and we should embrace it,” he said in 2013 at a British Chamber of Commerce event in Hong Kong.

Similarly, during his time as mayor of London, Johnson brokered deals with Chinese firms to invest in the capital.

Liam Fox, the new Secretary of State for International Trade, will also play a key role in forging trade links.

Dr Jonathan Sullivan, director of the China Policy Institute at the University of Nottingham, described Johnson as a “loose cannon” and said the pressure on Britain to find new trading partners meant London was set to lose leverage on issues such as Hong Kong.

“The UK is severely weakened by Brexit – economically and diplomatically. It will need strong economic links with China and Beijing knows that the UK’s bargaining position is very weak. It will be very difficult for the UK to make representations about Hong Kong in [diplomatic discussions],” he said.

Brexit shadow looms large over China’s exports to Europe

Just last year, the UK and China marked the start of a “golden era” spearheaded by prime minister David Cameron.

But George Osborne, the architect behind a flourishing diplomatic relationship with China, was ousted as Britain’s finance minister last week by Theresa May, the country’s new leader.

Osborne’s sacking removed “a driving force behind the launch of the so-called golden era in UK-China ties”, Duncan Innes-Ker, China analyst at the Economist Intelligence Unit, said. He predicted the new administration would remain committed to deepening trade ties but be distracted by negotiating Britain’s exit from the EU.

Innes-Ker suggested the change in leadership could even benefit Hong Kong and stressed it was too early to assess any clear departure from Cameron’s policy.

“It is possible that May could adopt a more balanced position on some issues, such as the UK’s role as a guarantor of the Joint Declaration,” he said, referring to the agreement signed by China and Britain in 1984 that set out the terms of Hong Kong’s return to Chinese sovereignty in 1997.

Brexit or not, London will stay open for Chinese business

Meanwhile a Hongkonger has attracted about 5,000 signatures to a parliamentary petition calling for another referendum on leaving the EU once the terms of the exit with Brussels and the 27 other member states have been agreed.

At 10,000 signatures, the government responds to the petition, and at 100,000 it is considered for a parliamentary debate.

The man behind the petition, expat William Kerr-Muir, said: “The possibilities for the future British relationship with the EU vary so widely on key issues such as the European single market and immigration.

“There’s been no clarity so far on either side and it’s important that the opinion of the British people is heard again once there is a clearer picture of what Brexit will mean in reality.”

Kerr-Muir has the support of opposition Labour MP Owen Smith, who is challenging for leadership of the party and has promised a second referendum. However, a rival petition to deny the request for another vote has attracted 6,700 backers.