Rachel Reeves visit to China re-establishes UK’s ties with second largest economy in the world
Agreements worth £600 million secured with China
13 January 2024 | Author: Winnie Cao
The Chancellor, Rachel Reeves, visit to China on the 11th of January has helped re-establish business ties with the second largest economy in the world, which bodes well for both Chinese and British businesses.
Winnie Cao, Partner and Head of the China desk said:
Rachel Reeves and Vice Premier He Lifeng’s constructive dialog during the Chancellor’s visit is good news for both countries. Agreements worth £600 million that could add £1 billion of value to the British economy have been secured.
Another positive outcome from this visit is the opening up of the legal services market, allowing more UK law firms to operate in China. This will be welcome as many Chinese businesses are seeking to invest overseas, but they often struggle to obtain clear professional guidance within the same time zone as local law firms tend not to have in-house UK expertise.
The Chinese Institute of Certified Public Accountants (CICPA) and The Institute of Chartered Accountants in England and Wales (ICAEW) have said they will explore expanding the scope of mutual examination exemptions. This means Chinese accountancy students might be willing to take more exams in order to obtain a UK ICAEW qualification, and vice versa.
This is positive news for accountancy firms in both countries. Firstly, the UK accountancy market has struggled for talent in recent years, and having more UK qualified accountants in China may open up cost effective outsourcing opportunities over there. Secondly, Chinese accountants who are UK qualified will greatly benefit Chinese businesses wishing to expand into the UK.
Currently, one of the notable challenges for Chinese businesses investing overseas is often an initial business cultural shock, part of which is caused by differences in tax and accountancy rules. If Chinese businesses have a larger talent pool with UK qualified finance professionals, this will bridge that gap and make collaboration easier.
Winnie concluded
Although this renewed relationship is fantastic news, the UK government should grab the opportunity to introduce a social security reciprocal agreement between the UK and China, as similar arrangements exist with South Korea and Japan. This agreement would reduce both costs and administration for expatriates moving between the two countries, helping Chinese and British businesses to invest in each other with more ease.
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If you would like to discuss any of the above, please speak to your usual Blick Rothenberg contact or Winnie Cao using the form below.
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