Photo: GT

British businesses are calling for strengthened China-UK ties following the UK government's recent decision to remove Huawei from its 5G networks by 2027, for weakened bilateral relations will almost certainly affect UK businesses' ability to operate in China.

"Uncertainty around the business environment as a result of the current political climate is likely to deter investment which would ultimately be the detriment of both the Chinese and British economies," Steven Lynch, managing director of the British Chamber of Commerce in China, told the Global Times.

"We hope that the UK Government's decision concerning Huawei does not cast a shadow on UK-China bilateral relations or the strong business relations of UK and Chinese companies," Lynch said, noting that the chamber supports open and transparent markets, and constructive dialogue to enhance both countries' business environments and improve market access.

"If the long term mutual benefits of friendly cooperation between China and the UK continue to be overshadowed by Huawei and Hong Kong related splatter, one can anticipate recovery in cross border investment and trade be stifled," a source with a UK-based multinational consulting service provider told the Global Times.

Fortunately, buoyed by the stock market's strong recovery since March and large IPOs this year at the Chinese mainland and Hong Kong stock exchanges, the short term impact on the financial market is less significant in comparison to other sectors already suffering due to the COVID-19 pandemic, according to the source.

However, the source noted that UK businesses could encounter more problems in China, should the two counties' relations continue to worsen.

The London-based telecoms enterprise Vodafone held talks with the UK government about easing the burden of removing Huawei from its UK networks, Reuters reported Friday.

Vodafone also said that UK government's ban on Huawei should not be "extrapolated" to the rest of Europe as other countries have different geopolitics at play, according to Reuters.

China was the UK's sixth largest export market in 2019, with exports of goods and services to China worth a record high £30.7 billion ($39.2 billion), according to the report by the UK Office for National Statistics on July 14.

China is now the 6th biggest export market to the UK, compared to 26th in 1999, the report showed.

China and the UK have seen their connections in trade and investment significantly rise in the past few decades, and they would be expected to increase if bilateral relations remain normal, experts said.

"China is a strategically important and top priority market for Standard Chartered, and we have a long-term commitment to China," Standard Chartered Bank told the Global Times Friday, noting that the company is excited about the prospects of the continuous opening-up of China's financial sector, which presents exciting opportunities to Standard Chartered.

The company said it will continuously invest in China, including its recent announcement of an investment worth $40 million in the Standard Chartered Greater Bay Area Center in Guangzhou, Guangdong Province, on July 20.

"It is our hope that the current political environment does not cast a shadow on UK-China bilateral relations or the strong business relations of UK and Chinese companies," said Lynch, adding that irrespective of the UK's decision, British businesses will remain committed to China market.

China stands against foreign governments that reject and oppress certain businesses from a particular country, under the pretext of national security, supported with no solid factual evidence, said Foreign Ministry spokesperson Wang Wenbin on July 20, when being asked by foreign media about the UK's decision to not use Huawei in the country's 5G networks.

"Such practices will only erode one's own interests and credibility, and stand in the way of development and progress for mankind," Wang said.