What does the business community in China think about the
UK's EU referendum?
In order to answer these questions, we contacted and collected
information from our clients who are doing business or are planning
to have offices in the UK or the continent.
An often-heard comment here in China is that the UK referendum
debate has produced great uncertainty. It seems that investors need
to wait to see the result of the referendum before making any
decisions to invest in the UK. Of course, this also could be an
invaluable opportunity for speculators to do arbitrage. Most
Chinese investors are wagering that Britain will definitely vote to
continue its membership of the EU at the last minute, while there
are still others who are not so optimistic and concerned that an
exit may adversely affect the UK's influence over the EU
market. Some people argue that a "leave" vote might lead
to a weakening of the UK's ties to the European continent, and
if so, they will have to reconsider where to set up their business
centers. A UK business headquarter without free access to the EU
market definitely appears unattractive to Chinese investors.
How might a possible Brexit affect foreign direct investment
from your jurisdiction into the UK? And into the rest of the
Investors expect a place where they can make the most use of the
location. They are worrying that a Brexit may lead to the UK losing
the advantage of the freedom of movement of goods, services and
people in the EU. Chinese investors would prefer to have their
headquarters in one country and expand their business to as many
countries as possible. There is also concern among Chinese
investors that a Brexit may isolate UK headquartered companies from
the rest of Europe. So, if the UK withdrew from the EU, Chinese
investors may be more likely to move to the continent.
Is the Brexit debate seen purely in economic terms, or does it
expose a wider disagreement about the role of supra-national
rules-based collaboration models?
At present, investors mainly look at this as an economic issue
and we have not received any comments on its political
In the event that the UK votes to remain in the EU, what is the
view about whether the referendum process has strengthened or
weakened the EU as a concept? What might be the long term effects
The view here is that after one referendum, it would be very
difficult for another to happen. A UK vote to remain is more likely
to strengthen the EU and enhance EU stability in the longer
What is the view on whether a Brexit would be the first step
towards the drastic reorganisation or even collapse of the European
Reorganisation is more likely than collapse in our view. In the
event of a leave vote, Chinese investors expect that agreement
would be reached between the UK and other member states to manage
the exit as soon as possible. No one we have spoken to believes
that the EU would collapse in the event of a UK vote to leave.
Either way, some form of compromise is thought to be the only
realistic result. Given the current reform package obtained by the
British government and the existence of special treatment for some
member states, further reorganisation of the EU is likely to be the
most pragmatic solution.
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