Chinese Premier Li Keqiang has held a video conference with business representatives from the UK on July 6. Photo: a screenshot from www.gov.cn

Chinese Premier Li Keqiang held a video conference with business representatives from the UK on Tuesday, with the two sides discussing a wide range of issues including bilateral relationship, pragmatic cooperation, measures to improve the business environment and counter the impact of the COVID-19 pandemic. It marks the first formal business communication between the two countries in the absence of high-level diplomatic dialogue this year.   

Observers said the meeting will create a "benign atmosphere" for deepening business ties amid a political flare-up, which is of particular importance for the UK in post-Brexit as it is essential to for London to expand cooperation with the world's second-largest economy to cushion its withdrawal from the EU and elevate its influence on the global stage. 

Although Britain is likely to continue following the political steps of the US to make things difficult for China in order to achieve its diplomatic goal, relations between China and the UK could move toward a more balanced and mature status, analysts predicted, noting that the Johnson government will aim to strike a balance between political dependency on Washington and close economic relations with Beijing. 

Li said at the conference that stable China-UK relations are conducive to upholding free and fair trade, pushing forward the global economic recovery, tackling global challenges and creating more benefits for the two peoples, according to the official website of China's State Council. 

 "China is willing to work with the UK to cement mutual trust, mutual respect, seek common ground while reserving differences, deepen win-win cooperation, and accumulate consensus and solve disputes through equal dialogue to promote the sound and stable development of bilateral relations," Li said. 

China and UK are among the first countries to develop and produce vaccines. China insists vaccines are global public goods and has cooperated with many other countries in vaccines, he said, adding China would like to increase communications and share research outcomes with all sides, especially on virus variants, to promote global victory against the epidemic.

Representatives from more than 30 multinational companies and organizations, including Standard Life, Diageo, AstraZeneca, and Unilever participated in the meeting.  

"The meeting shows that both sides have high expectations on the prospect of bilateral economic ties despite recent political disputes. More potential for cooperation and trade could be released afterwards," Cui Hongjian, director of the Department of European Studies at the China Institute of International Studies, told the Global Times on Tuesday.

Lord Sassoon, the President of China-Britain Business Council (CBBC), said in a statement sent to the Global Times on Tuesday that he hoped that, upon the meeting, the two governments will resume their high-level economic dialogues"to the benefit of UK jobs and to building back better across the UK."

The meeting was held at a time when relations between China and the UK have been in a downward spiral, as the latter has closely followed Washington's lead in a crusade against China in a wide range of areas ranging from banning Huawei from local 5G network construction to pointing a finger at China's internal affairs regarding Hong Kong and Xinjiang. 

"It sent a message to the world that the political uncertainty could be managed properly so that it does not inhibit the normal economic cooperation between China and the UK, and a more stable, balanced and comprehensive bilateral relations could be expected in the near future," Cui stressed.

The UK is now undergoing a "drastic and nuanced" adjustment in its diplomatic and economic policy after pulling out from the EU. From an economic sphere, it departed from its traditional strategy of over-reliance on EU and leans more toward the Indo-Pacific, of which China carries a special weight, Cui said.  

At such a time, "UK companies' desire to access the Chinese market is rising rapidly, as some of their doors to the EU market are completely shut," Cui said, citing the financial services sector where both sides need each other.

UK Chancellor Rishi Sunak said at his annual Mansion House speech in July that London was well placed to serve a fast growing Chinese "financial services market with total assets worth 40 trillion pounds," the Financial Times reported. The comment comes after the UK's efforts to reopen direct access to EU financial services markets had failed.

Access to the Chinese financial market is also an important pact under the China-EU Comprehensive Agreement on Investment, which has been put on hold. 

"Brexit also reshapes the UK's relationship with the EU. Britain will be forced to compete with the EU on several fronts, and that's why forging a closer ties with a strong, powerful business partner like China matters," Cui said. "Calls to join the CPTPP are rising in London, which - once completed - will indirectly aid it to facilitate relations with China and stabilize its international standing."

Meanwhile, positive China-UK relations also could offer insight for the EU, the US' transatlantic ally, analysts said.  

In the political sphere, the UK has tended to rely more heavily on the US in the fields of political security after leaving the EU, Zhao Junjie, a research fellow at the Institute of European Studies of the Chinese Academy of Social Sciences, told the Global Times on Tuesday.

However, whether the two countries would strengthen ties remains uncertain, as the US has been evaluating the UK's value now with a possibly weakened position after Brexit, while the UK is also considering the pragmatic benefits it can get by following the US' footsteps, according to Zhao. Observers expect the UK to maintain a balance between the US' political influence and its autonomy over economic issues, including lifting relations with China. 

Premier Li vowed at the meeting that China will treat all market entities, including foreign enterprises, equally. He also urged the UK to provide a fair, just and non- discriminatory business environment for Chinese firms that invest in the UK. 

In July, Chinese semiconductor company Nexperia said it plans to acquire Newport Wafer Fab (NWF), the UK's largest chip producer. The deal remains uncertain as it needs to win approval from the UK government amid mounting US pressure on allies to join its crackdown on China. 

Cui predicted that London will find a point to minimize the impact of political factors on economic gains. 

He also noted that in addition to semiconductors, China and the UK could also widen cooperate in new materials, green economy and infrastructure.

China is the UK's largest trade partner, and the UK is also China's second-largest trading partner in Europe. Bilateral trade was worth 24 billion pounds as of the first quarter of 2021, according to data from CBBC.