Resaerch On Influence Of Brexit Referendum To Economic And Trade Relation Between UK And China

On June 24,2016,the resolution of leaving EU was passed by the referendum in Britain.The referendum result was much more than anyone had expected.This event comes with profound and historical factors.The Britain tends to maintain the independence of sovereignty,however,the EU prefers giving part of sovereign up for common political interests,which is the difference of political philosophy.The psychological and cultural identity differing between EU and Britain helps the breaking up.There are also many practical factors:high EU membership dues and European debt crisis,immigration and refugee crisis,the political game between Britain and EU.Britain's economic strength and momentum are much stronger than it was.The transformation of economic status has enabled Britain to have the confidence to leave EU.Brexit will have a huge impact on Britain itself,the European Union and the global political economy.Membership of the European Union is a passport to the European unified market,low tariffs and low barriers to trade.In order to deal with the relationship between the Britain and the EU after the retreat,Britain can choose the EEA model,FTA model or WTO model,for economic and trade exchanges with EU.These models will bring losses to different extent.Trade and investment between EU and Britain will be severely affected.Britain's position as international financial center will be compromised and the overall strength of the European Union will decline.As open economic equity,China and Britain have frequent economic and trade contacts with each other.Government leaders also spared no effort to promote economic and trade relations between the two countries.At present,trade between China and Britain is characterized by strong complementarities.The economic and trade exchanges play an important role in both of two countries.Brexit leads to welfare losses and decline in revenue,which has impact on demand for overseas goods and services.Then a negative effect on bilateral trade will be imposed.Britain's ability to attract overseas investment has been negatively affected without access to the European unified market.The emerging market countries,represented by China,are in a stable political and economic environment and are conducive to the movement of FDI.Brexit has caused a major change in the position of the trade agreement,which will also affect bilateral economic and trade exchanges between China and Britain.This paper attempts to analyze the current situation of Sino-British economic and trade exchanges,and predict the possible impact of Britain's removal from Europe on Sino-British economic and trade relations,and give China policy recommendations to cope with this change.Finally,we believe that we can strengthen the management of international public opinion,establish a Sino British Free Trade Zone,adjust the foreign exchange policy,and promote the internationalization of RMB as a response to Brexit.Active move will transfer the risk and disadvantage to opportunity.