Bad News Brexit

Notes from Stockholm China Forum

Authored by GMF Fellow Amy Studdart and originally posted here.

We just concluded a discussion nominally on European China policy which quickly descended into a lamentation of the Brexit and everything that’s followed since. Current mood: David Cameron, desperate for drink, eyeing up escape route from world.

Cutty Sark v Little England

The Brexit campaign was centered around a promise that two contradictory theses could be reconciled: a nimble Britain trading at speed around the world, and a Britain scared of foreigners and foreign influence. In a modern economy, it will be impossible to realize both promises, and yet the UK’s new government has continued to speak as if it might. As such, there is little clarity about what a post-Brexit Britain will be: will it be a nimble Singapore? Or will is instead close its doors to foreign students, foreign workers, and foreign goods?

Bad for China, Bad for Britain, Bad for Europe

Even if the UK, independent of the EU, moved more quickly to reduce regulation, open its markets, and develop its economic relationships, its utility to China and the world will be far less.

“Britain will be easier to bully. It will be more biddable, more desperate. But it will be less useful.”

The EU is the most significant market in the world — a liberal Britain within the single market is far more useful than an unencumbered liberal Britain outside of it. Chinese companies will lose access to the European single market and Beijing will lose a friend in EU discussions on free trade.

We’ll be discussing populism in greater depth a little later on today, so come back this evening for more on that. Between now and then, we’ll be discussing over-capacity in the Chinese economy (and the impact its having on jobs in the U.S. and Europe), and cooperation on third areas from Syria to North Korea.

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