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Brexit to open new opportunities in China-UK trade, top Chinese banker says

BOAO, China — The U.K.'s exit from the European Union (EU) will present new opportunities for free trade with the world's second-largest economy, a former Chinese banker said Saturday.

"Brexit will pave a new path for free trade between China and the U.K.," Li Ruogu, former chairman of the Export-Import Bank of China, said at the Boao Forum held in the Hainan province of China.

Despite fears about rising protectionism and anti-free trade forces in the current global environment, Li said the U.K. may already be a more open market than the EU. He cited inefficiencies in EU agricultural policies and its disputes with China regarding the steel trade as examples of protectionism in the EU.

"After Brexit, China and U.K. trade may get freer, especially in financial services," said Li, who was speaking in a panel moderated by CNBC anchor Geoff Cutmore.

Chinese President Xi Jinping (R) shakes hand with British Prime Minister Theresa May (L) before their meeting at the West Lake State House on September 5, 2016 in Hangzhou, China.
Etienne Oliveau | Getty Images
Chinese President Xi Jinping (R) shakes hand with British Prime Minister Theresa May (L) before their meeting at the West Lake State House on September 5, 2016 in Hangzhou, China.

Li said China will be focusing on market reforms and the restructuring of state-owned enterprises in its next phase of economic development, opening up new opportunities with the U.K. in terms of financing.

Even though there are fears that London's position as a financial services hub may be jeopardized after Brexit, panellists said that may not be the case if it manages a softer landing. The U.K. is a major offshore yuan clearing center.

And even though the U.K. is not a big country with a large population, it still has a competitive edge in areas such the financial services, said Li.

With China promoting the One Belt, One Road initiative which the U.K. is participating in, there will be a lot of room for collaboration between the two countries, he added.

China has invited U.K. Prime Minister Theresa May to attend a summit in May on the ambitious project to build a new Silk Road, Reuters reported last month, citing sources. This reflects Chinese thinking that the U.K. will be influential in promoting the trade route.

On New Year's Day, China launched its first freight transport by train from the Chinese city of Yiwu to London.