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UK, China relaunch economic dialogue to boost trade

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Seeking to capitalize on the growth of the world’s second-largest economy and the further opening of its financial markets, the UK has relaunched a platform for future “respectful and consistent” relations with China.

On Saturday, Chancellor of the Exchequer Rachel Reeves met with Chinese Vice Premier He Lifeng in Beijing for the renewal of the UK-China Economic and Financial Dialogue, which had previously been held annually and was last held in 2019. Both sides agreed to deepen cooperation in areas such as financial services, trade, investment, and climate to support secure growth.

A number of British financial services companies with extensive operations in China, including HSBC, Standard Chartered, Prudential, Schroders, Fidelity International, and London Stock Exchange Group, joined the Minister’s business delegation.

After the event, the delegation visited Shanghai, the financial center of the country.

The British government said in an online statement that through this “pragmatic cooperation,” the two countries had secured deals worth £600 million (US$732.3 million) for the UK over the next five years, which it estimated could eventually be worth up to £1 billion.

Chinese Foreign Ministry spokesman Guo Jiakun told a press conference on Monday that the dialogue was “conducive to development” for both sides. He added that both sides were “against divergence” and would “reduce barriers to investment,” describing the financial sector as “the crux” of the relationship.

Cooperation in financial services

“Financial services cooperation is probably the easiest method for bilateral engagement,” said Xu Tianchen, a senior economist at market research firm Economist Intelligence Unit.

Xu Tianchen, who heads the general office of the Central Finance Commission, has an important role in Beijing’s financial policymaking, he told the South China Morning Post.

“Chinese enterprises’ demand for financial services is growing rapidly as they expand globally, and the UK is a natural center for this,” Xu said.

In 2013, London became one of a handful of offshore centers allowed to process investments in China’s controlled yuan currency, bringing the UK closer to the fast-growing Chinese market than the rest of Europe. Chinese state-owned banks were also allowed to increase their activities in the UK at the time.

And in London this year, China announced plans to issue its first overseas sovereign green bond, which will finance environmentally friendly projects.

The British Chamber of Commerce in China said the engagement was related to the confidence of business people in the world’s second-largest economy.

In search of new investment

China is keen to find new sources of investment and trade after nearly seven years of friction with the US, its largest single trading partner, and ahead of new tariffs on Chinese imports after US President-elect Donald Trump took office on January 20.

Andrew Collier, China analyst at economic research firm GlobalSource Partners, said China needs Western countries to sustain trade with its own economy.

The British government announced at the weekend that the UK and China had agreed to remove trade barriers with a package “led by pork, wool, poultry, and pet food.”

China has also agreed to “continue to liberalize” sectors that “restrict foreign investment” such as education and culture.

Labor seeks more economic engagement with China

According to statistics from the UK Department for Business and Commerce, there was a 20.3 percent fall in the total trade volume between the two countries of £87.7 billion in the 12 months ending in June.

As of 2022, the stock of British direct investment in China was £11.2 billion, while China’s stock was £4.3 billion—less than 1 percent of the total for both sides.

But the Chatham House think tank said in a commentary published on Thursday that the current Labour government was seeking greater economic engagement with China than its predecessor.

Alicia Garcia-Herrero, chief Asia-Pacific economist at French investment bank Natixis in Hong Kong, said Britain also faces uncertainty about how Trump will behave while in office. Concerns are high about the possibility of the US extending tariffs to UK shores.

In addition to this concern, a large number of companies exited the London Stock Exchange last year in search of higher value or moved their main listings elsewhere, leading to the market’s worst outflow since the 2009 global financial crisis. Bond markets in the UK have been volatile amid concerns over the government’s spending plans.

“If your financial sector is hurting, [the visit to China] makes a difference,” Garcia-Herrero said.

DIPLOMACY

Fidan and Rubio discuss Syria, Gaza, and defense in US meeting

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Minister of Foreign Affairs Hakan Fidan and his accompanying delegation began a two-day visit to the US.

During the visit, Fidan met with US Senator Marco Rubio. According to a statement attributed to US State Department Spokesperson Tammy Bruce, the two discussed cooperation on key issues in security and trade.

Rubio requested Turkey’s support for peace in Ukraine and the South Caucasus, while appreciating Ankara’s leadership in the “Global Coalition to Defeat ISIS.”

According to the spokesperson, the American senator reiterated the need for close cooperation to support a “stable, unified, and peaceful Syria,” stating they do not want Syria to be “either a base for international terrorism or a pathway for Iran’s destabilizing activities.”

Rubio also highlighted recent progress in bilateral trade and encouraged an even greater economic partnership moving forward.

Finally, the Senator expressed concerns regarding the recent arrest of Ekrem Imamoglu in Turkey and the subsequent protests.

Turkey has not made an official statement: AA reported based on ‘foreign ministry sources’

According to Turkish Foreign Ministry sources cited by AA, Fidan and Rubio emphasized the “importance of engaging with the Syrian government” during their meeting on Tuesday.

The sources stated, “Both sides emphasized the importance of engaging with the Syrian government and expressed their determination regarding the stabilization of Syria and the fight against terrorism.”

According to the sources speaking to AA, Fidan and Rubio discussed a range of regional and bilateral issues, including the need for a permanent ceasefire in Gaza, deemed essential for “regional peace.”

The sources also mentioned that the issues discussed in the phone call between President Recep Tayyip Erdogan and US President Donald Trump on March 16 were followed up on during the meeting.

The two sides also discussed preparations for upcoming presidential-level visits and expressed their determination to remove obstacles to defense cooperation.

The report added, “Both sides clearly expressed their political will to remove obstacles to cooperation in the defense industry. Technical meetings will be held to resolve existing issues.”

The two sides also discussed efforts to achieve a ceasefire between Russia and Ukraine, with Turkey expressing support for recent US efforts in this direction.

The talks also covered the ongoing peace process between Azerbaijan and Armenia and the importance of Bosnia and Herzegovina’s stability for the entire Balkan region.

Is Hamas on the table?

Meanwhile, Trump, during a White House meeting with a group of US Ambassadors confirmed by the Senate, referred to Turkey and Erdogan as a “good country, a good leader.”

The new US Ambassador to Ankara, Thomas Barack, was also present at the meeting. Barack, known as a close friend of Trump and a real estate magnate, thanked the President for appointing him to Turkey, “one of the ancient civilizations.”

In an article penned by Murat Yetkin in Yetkin Report, it is alleged that Trump might engage in bargaining over Hamas and Gaza in exchange for steps such as lifting CAATSA sanctions against Turkey.

Yetkin relays that CHP leader Ozgur Ozel, in a statement on March 18, referred to the Trump-Erdogan phone call, criticizing the lack of mention of Gaza and Israel, and accused Erdogan of “selling out the Palestinian cause for Trump.”

Recalling that Trump’s special representative Steve Witkoff told Tucker Carlson in an interview that they expect “good news” from Turkey, Yetkin underscores that Witkoff also stated elsewhere in the interview, “A terrorist organization cannot run Gaza; this is unacceptable for Israel. But their disarmament is possible. Then they can stay for a while longer and even get involved in politics.”

Yetkin asks, “Is Trump supporting Erdogan because of a plan to disarm the PKK and Hamas together?” while also noting that the Secretary of the PLO Executive Committee, Hussein al-Sheikh, met with Foreign Minister Fidan in Ankara on March 19, before Fidan flew to the US.

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DIPLOMACY

Agreement reached on Black Sea navigation safety between US, Russia, and Ukraine

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According to a statement from the White House, the US has reached an agreement with Ukraine and Russia to ensure navigational safety in the Black Sea.

It was stated that both sides agreed to refrain from using force and would not permit commercial vessels to be used for military purposes.

In return, the US will assist Russia’s return to the global market for agricultural products and fertilizer exports, reduce maritime transport insurance costs, and expand access to ports and payment systems for such operations.

Additionally, Washington has reached an agreement with Kyiv and Moscow to halt mutual attacks on energy facilities.

The White House stated, “The US will continue to facilitate negotiations to achieve a peaceful resolution between the two sides.”

Simultaneously, it insists on fulfilling US President Donald Trump’s demand to “stop the killings on both sides.”

Ukrainian Defense Minister Rustem Umerov confirmed the agreement but claimed that “Russia moving its warships outside the eastern part of the Black Sea would be considered a violation of the spirit of this agreement,” a breach of obligations to ensure freedom of navigation, and constitute “a threat to national security.”

Umerov asserted that in such a situation, Ukraine would “exercise its right to self-defense.”

Umerov also reported that the presidents of all parties agreed to implement agreements on a complete cessation of attacks on the energy infrastructure of Ukraine and Russia.

Furthermore, according to Umerov, the US confirmed it would assist with prisoner exchanges, the release of civilian detainees, and the return of forcibly displaced Ukrainian children.

A provision to this effect is also included in the White House statement.

“Effective implementation of the agreements will require additional technical consultations to coordinate all details, including ensuring monitoring and control of the agreement,” Umerov added.

Russia confirmed its agreement not to use force in the Black Sea amid the ongoing war with Ukraine.

However, Moscow insists on inspections to prevent the use of commercial vessels for military purposes.

The Kremlin also emphasized that compliance with the Black Sea ceasefire would begin after sanctions related to Russia’s food and fertilizer exports are lifted.

Specifically, this involves connecting the Russian Agricultural Bank (Rosselkhozbank) to the SWIFT system and opening necessary correspondent accounts.

Besides this, Moscow expects the removal of restrictions on food and fertilizer producers and exporters, and the elimination of obstacles for insurance companies working with such cargo.

Another point is the lifting of sanctions on Russian-flagged vessels used in the trade of these products and the removal of restrictions on their servicing in ports.

Finally, the Kremlin demanded the resumption of unobstructed supplies of agricultural machinery to Russia.

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DIPLOMACY

Athens postpones Mitsotakis-Erdoğan meeting after Imamoglu arrest

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The arrest of Istanbul Mayor Ekrem Imamoglu has shaken diplomatic relations between Türkiye and Greece, leading Athens to announce the postponement of a planned meeting between the leaders of the two countries.

Greek government spokesperson Pavlos Marinakis stated, “Given these developments, it is becoming difficult to organize the High-Level Cooperation Council between Greece and Türkiye immediately.”

The High-Level Council consists of a series of meetings aimed at improving relations through “soft politics,” as progress on contentious issues such as territorial disputes has stalled.

As Kathimerini recently reported, the meeting planned between Greek leader Kyriakos Mitsotakis and Recep Tayyip Erdoğan on April 8 was not yet finalized due to the political crisis in Türkiye, even though negotiations between Athens and Ankara had reached their final stage.

The spokesperson added, “We are monitoring the developments in Türkiye. The situation remains fluid and concerning. Our stance on Imamoglu has not changed. Concessions on the rule of law and political freedoms are unacceptable, and convincing answers are needed for any concessions made.”

Marinakis mentioned that the issue could be discussed by the foreign ministers of both countries at the NATO foreign ministers’ summit in Brussels in early April.

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