The UK-China economic and political cooperation: The Brexit implications

Luiza Kostecka-Tomaszewska () and Monika Krukowska ()
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Luiza Kostecka-Tomaszewska: University of Bialystok, Poland
Monika Krukowska: SGH Warsaw School of Economics, Poland

International Entrepreneurship Review, 2023, vol. 9, issue 3, 7-19

Abstract: Objective: The research aimed to examine the strength and nature of the UK’s relations with China under new circumstances caused by Brexit. Specifically, this article attempts to answer what was the impact of Brexit on economic and political relations between the UK and its significant economic partner, China. In pursuance of the goal, the authors discuss the economic and political implications of a new status quo in bilateral cooperation in the field of trade and investment and the political aspects of Brexit for both partners. Research Design & Methods: We explored the UK-China relationship in the context of Brexit implications using a literature analysis and examined the strength and nature of economic relations between countries mentioned above using the trade orientation and intensity indicators. Findings: Brexit created a new landscape for bilateral cooperation between the UK and its partners worldwide. The long-term consequences of Brexit will continue to unfold in years to come, but we may already recognize some early trends in bilateral relations. The analysis of the UK’s trade orientation based on the historical data for the period 2013-2022 revealed the decreasing significance of Germany and the increasing position of China and the United States as the UK’s trading partners. Moreover, the analysis of trade intensity revealed the lowest trade intensity between the UK and China post-2012 compared with Germany and the US. Nevertheless, the values of the trade intensity index with China indicate that there is still potential to increase exports to China. Implications & Recommendations: The proposed set of indicators can serve to question the major tendencies of bilateral trade. Together, the indicators portray a comprehensive picture of interdependence and the strength of existing connections between two countries and help examine whether cooperation is strengthening or weakening. The orientation index identifies the strength and importance of the relationship with the trading partner relative to other trade relations’ significance and monitors the progress of the cooperation, while the trade intensity index can be used to determine whether the value of trade between two countries is greater or smaller than expected based on their importance in world trade. The analysis results will allow scholars to determine possible actions that should be undertaken by the UK and – possibly – the EU to develop trade and investment cooperation with China in a more balanced way. Contribution & Value Added: The article extends the knowledge of Brexit’s economic and political implications for UK-China bilateral cooperation. Furthermore, the article presents a comprehensive analysis and evaluation of the current UK-China relations in the context of Brexit. We examined economic relations between the countries mentioned by means of trade orientation and intensity indicators.

Keywords: Brexit; UK-China relations; trade; trade orientation indicator; trade intensity indicator (search for similar items in EconPapers)
JEL-codes: F13 F14 F15 F50 (search for similar items in EconPapers)
Date: 2023
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