The Brexit vote was a shock to the world, as the UK chose to leave the EU in 2016. Since then, there has been much debate around the potential outcomes and impacts of Brexit, particularly as the UK continues to struggle to reach a suitable agreement with Europe. The situation has been further muddied by the coronavirus pandemic and the rising tensions between the UK and its allies. In this article, we will be exploring how China has reacted to Brexit and the UK’s “inevitable decline” since the referendum three years ago.
China’s Response to Brexit
China has generally responded to Brexit with a wry optimism, seeing Britain’s departure from the European Union (EU) as an opportunity for the nation’s empire to overtake the declining one in Europe. Many of China’s state-run media outlets have been vocal about their position, writing off Britain’s post-Brexit future as a “shadow of its past greatness” and insisting that Brexit would lead to the UK’s “inevitable decline.”
China’s reaction is rooted in its belief in the “inevitability of history” – the idea that certain civilizations come to a peak at a certain point in history and that the UK is playing its role in the demise of the European empire. As China sees itself on the rise and Europe slipping back, Beijing has been quick to mock the UK’s demise, claiming it as a victory for their own proponents of history.
The Chinese government has also taken further steps to capitalize on Brexit’s potential fallout. In 2017, the nation’s state-run media outlets were quick to suggest that British universities, many of which rely heavily on European students, would now be forced to turn to China for the next generation of academics. As Brexit hit the headlines, universities saw a dramatic drop in the number of European applications, leaving them with little choice but to recruit from farther afield. As such, China welcomed the opportunity to send more of its students abroad, touting the event as an example of its increasing global clout.
China’s Impact on the UK Economy
The immediate economic effects of Brexit were felt in the UK almost immediately. With the once-strong pound now looking significantly weaker against other currencies, foreign investors withdrew their capital from the country, leaving the market in a volatile state.
However, this state of affairs has been seen as an opportunity by Chinese investors. Knowing that the UK is unlikely to recover any time soon, investors have been quick to jump on cheap assets and stocks; many of which were initially worth significantly more prior to Brexit.
Chinese investors have been particularly active in the London property market, where overseas investors are generally exempt from the usual taxes and transaction costs. As the UK market has entered an uncertain period, Chinese investors have scooped up prime real estate, often at a fraction of the original value.
The UK government has taken notice of this and has introduced measures to curb Chinese investment, including increasing taxes and fees on commercial properties owned by overseas investors. However, these measures have not been enough to staunch the influx of Chinese money into the UK, as investors continue to see value in the uncertainty and remain keen to invest in the country.
Will Brexit Lead to Britain’s Inevitable Decline?
While China’s media outlets have been vocal about their belief in the UK’s post-Brexit decline, the situation on the ground paints a somewhat different picture. According to the Office of National Statistics, the UK economy has continued to grow since the Brexit vote and is, in fact, outperforming many of its European neighbours.
Moreover, the UK’s strong trading ties with the US, coupled with its world-leading financial sector, is being widely lauded as a key factor in the nation’s continued economic growth. These factors, along with the UK’s continued commitment to innovation and research, mean that living standards and wages are continuing to rise in the UK, despite the uncertainties surrounding Brexit.
However, there is no denying the major economic and political changes that will accrue should the UK make good on its promise to leave the European Union. In addition to the potential loss of trade and immigration rights, the UK could also face a major setback in terms of global diplomatic clout. Furthermore, the future of the UK’s financial sector remains unclear as the industry awaits an agreement with the EU over the regulatory framework that will be implemented after Brexit.
The UK’s Brexit vote sent shockwaves throughout the world, not least in China. While Beijing largely welcomes the UK’s exodus from the European Union, experts suggest that the fate of the nation may not be as dire as the Chinese media has been suggesting.
Despite the economic and political upheaval that may come with Brexit, the UK continues to outperform many of its European counterparts and remains committed to fostering innovation. Thus, it remains to be seen whether Brexit will really lead to the UK’s inevitable decline, or simply be another chapter in the nation’s long and storied history.
