"BEIJING, Jan 11 (Reuters) - British finance minister Rachel Reeves, facing criticism for traveling to China during financial market turmoil at home, said on Saturday she will act to ensure the government's fiscal rules are met.
Protected from a sharp rise in British interest rates, Reeves defended her budget at the onset of the two-day visit to China, where she engaged in high-level economic and financial dialogues that were stalled for nearly six years.
"Those fiscal rules that I set out in the budget in October are non-negotiable and we will take actions to ensure that we meet those fiscal rules," Reeves told reporters after meeting with Vice Premier He Lifeng.
The increase in British government borrowing costs, partly due to a global bond, drew comparisons with the 2022 "mini-budget" crisis that led then-Prime Minister Liz Truss out of Downing Street.
Nevertheless, this week's market fluctuations have been milder, with no signs yet of straining institutional investors that drove the Bank of England to emergency bond purchases in 2022.
Reeves, under fire from the opposition Conservative Party for going to China amid bond market turmoil, stated she would refrain from giving real-time updates on market movements.
In response to whether she would unveil measures to fortify buffers against the fiscal rules in her March 26 economic update, Reeves mentioned: "I committed just to have one budget a year and that budget will be in the autumn."
Reeves underscored that economic growth remains the top priority of the government.
The agreements brokered with China over the weekend, including pledges to deepen financial services trade and enhance agri-food exports, are valued at 600 million pounds ($732 million) for the British economy over the upcoming five years, Reeves disclosed.
When probed during a tour of a Brompton bicycle shop about following Washington and Brussels in imposing tariffs on Chinese electric vehicles, Reeves, who will visit Shanghai on Sunday, commented: "We keep issues under review but we make decisions in our national interest."
British car manufacturers "like Jaguar Land Rover export significantly to Chinese markets, and we aspire to support their growth," she expressed.
Post her visit to the bicycle shop, Reeves met Vice President Han Zheng, emphasizing the importance of candid dialogue in areas of agreement and disagreement.
Accompanied by Bank of England Governor Andrew Bailey, Standard Chartered Chairman Jose Vinals, and HSBC Chairman Mark Tucker, Reeves met with Chinese counterparts led by Vice Premier He Lifeng.
He encouraged British financial institutions to expand renminbi services, boost the global use of the yuan, and engage in green finance and China's pension industry.
Reeves anticipated the issuance of China's inaugural overseas sovereign green bond in London this year.
Her visit ensues a dialogue initiated last year between Prime Minister and President Xi Jinping, the first between the countries' leaders since 2018.
Reeves informed He that Russia's invasion of Ukraine, escalating geopolitical tensions, and climate change have heightened challenges compared to previous meetings.
"It is crucial to prevent economic leaps from weakening our national security and economic resilience," she indicated, emphasizing the quest to find common ground.
He pledged to collaborate with London to ensure an equitable, non-discriminatory business environment for each country's businesses.
The approach adopted by Starmer's administration contrasts with the previous Conservative government's firm stance on discrepancies with China, notably concerning human rights, Hong Kong, and allegations of Chinese spying.
U.S. President-elect's threats to levy tariffs on all imports might complicate Starmer's aim of reconstructing ties with China.
China ranks as Britain's fourth-largest trade partner, with trade estimated at nearly 113 billion pounds ($138 billion).
($1 = 0.8162 pound)"