Chinese minister of commerce opening Gao Hucheng said at a G20 meeting in Shanghai did not mentioned Brexit directly. He stated that major economies must lead the way in tackling problems, including slowing trade and sluggish growth. The G20 ministers, from the world’s major economies, agreed to cut trade costs, increase policy co-ordination and enhance financing. The levels of global trade and investment have not recovered to their pre-financial crisis height. Brexit effect is not so clear for China however some short and long term effects may be considered.
Short term turmoil
Brexit has added to the global financial uncertainty. The effect on Chinese currency and capital markets were evident. As a result investors are withdrawing from riskier assets and buy safe ones. As “emerging markets “, China included are considered to be risky, the capital markets suffered and stock exchange indices were falling. The value of Yuan against US dollar was declining although it is not so significant against euro and basket of currencies China pegs its currency. There is however vast volatility day after day. The yuan has suffered in the immediate aftermath of the referendum, PBoC- China’s central bank however has the tools at its disposal to moderate the fallout. In fact, the sudden depreciation of the yuan — happened, this time without the inquiry of global markets — and could even be considered as positive. People’s Bank of China will, as usual, face continued pressure to limit depreciation, and it will likely manage larger Brexit side effects. Recent data from markets do prove the “bounce back” effect. See picture below.
UK-Asia-China economic relations
Following Brexit, British trade with the faster-growing United States and Asia would probably continue. Between 2000 and 2014, the share of British exports to Europe fell from 60 to 45 percent. European markets, including the United Kingdom’s, account for a substantial 15.6 percent of China’s total exports.
Almost all new British trade is being created outside of Europe. As presented below in 2015 China became the third biggest trade partner of UK, taking over Netherlands. What’s significant, the trade with two biggest ones USA and Germany has decreased from 2011.
United Kingdom is also the biggest recipient of foreign direct investments FDI from China.
As presented below the flow of FDI from EU was decreasing within last 10 years and was around four times smaller than from other parts of the world.
Long-term perspective – effect in China
The EU is Chinese largest export market, and global companies may cut investment or leave the U.K. because it’s unclear whether they will still be able to sell into the EU’s single market of 500 million people without tariffs.
Some banks eg. US bank JP Morgan has warned 4,000 jobs will go and HSBC has said 1,000 City jobs will move to France. Rumors are sweeping the City that alternative trading sites are being set up in a number of other financial centers, including Luxembourg.
Brexit may delay internationally focused measures to liberalize China financial sector since London has became the major financial hub for Chinese European operations. It is to be observed whether Chinese banks would move some of their subsidiaries from UK (To Frankfurt as some say?).
On the other hand, China can take the opportunity with prudent moves of PBoC to put forward the yuan as an attractive alternative for pound and euro as reliable international reserve currency.
The euro-skeptics argue that the EU wants to grow into a super-state that benefit more on national sovereignty. They say that the U.K. has global clout without the bloc, including Commonwealth, and can negotiate better trade treaties on its own. It all needs to meticulously choose its partners. China may be one of most matching opportunities.
 BBC news July 13;20161
 In June the World Bank cut its forecast for the global economy in 2016 from 2.9% to 2.4%. And in April the International Monetary Fund had cut its forecast to 3.2% from 3.4%.